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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 colleague unlucky enough to have to attend reminded me that the potentially last G7 finance ministers’ meeting, or at least the last one that may matter at all, is scheduled for Iqaluit, Canada. In February. Iqaluit, which means a place of many fish in the local Inuktitut language, is according to Bloomberg home to [...]
Recently the executive director from Belgium presented the International Monetary Fund’s managing director with a CD of music by 17th century French courtier Jean-Baptiste Lully, best known today for dying from a gangrenous infection after clubbing his own foot with a conducting staff. The Belgian constituency is threatened with consolidation as part of reforms aimed [...]
Senator David Vitter (R-LA) submitted one of my questions to Federal Reserve Chairman Ben Bernanke, as part of his reconfirmation hearings, and received the following reply in writing (as already published in the Wall Street Journal online). Q: Simon Johnson: Andrew Haldane, head of financial stability at the Bank of England, argues that the relationship [...]
Mexico’s experience with the North American Free Trade Agreement (NAFTA) has been a disappointment, according to three scholars writing in a paper issued this month by the Carnegie Endowment for International Peace. In the paper, Rethinking Trade Policy for Development: Lessons from Mexico under NAFTA, Eduardo Zepeda, Timothy Wise, and Kevin Gallagher call for revisions [...]
For more than two years, financial turmoil has forced an ever wider scope of government intervention in many countries. It is natural that public authorities extend their reach in emergencies, and in many cases there was no other reasonable option. Moreover, in spite of the market rebound, many economies remain disrupted and fragile, making new [...]
Greece faces the most difficult situation that has ever confronted a eurozone country since the birth of the common currency in 1999. Without draconian measures by the Athens government the fiscal situation of the country will soon become unsustainable. A failure to pay off its debt, though remote, cannot be completely ruled out with risks [...]
The guiding myth underpinning the reconstruction of our dangerous banking system is: Financial innovation as we know it is valuable and must be preserved. Anyone opposed to this approach is a populist, with or without a pitchfork. Single-handedly, Paul Volcker has exploded this myth. Responding to a Wall Street insider’s Future of Finance “report,” he [...]
How should climate change goals be met to ensure that developing countries’ energy needs are not sacrificed? In a previous posting on RealTime Economic Issues, Meera Fickling offered a different view on an issue posed earlier by Nancy Birdsall and me in our article “Forget Emissions, Focus on Research” in the Financial Times. In this [...]
In a recent op-ed in the Financial Times, Nancy Birdsall and Arvind Subramanianasserted that rich countries were unfairly blaming the developing world for contributing to global warming, and they called for a shift away from focusing on emissions and toward exploiting “the latest available clean technologies” for poor countries. Unfortunately, their recommendation dangerously downplays the [...]
The Problem The underlying fiscal problems of the United States have significantly worsened as a direct result of how the financial crisis of 2008-09 was handled. The US economic system has evolved relatively efficient ways of handling the insolvency of nonfinancial firms and small or medium-sized financial institutions. A large number of these institutions have [...]