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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.
The G-20 Finance Ministers and Central Bank Governors, who met in Seoul over the weekend of October 23–24, made only minor progress on currency and balanced growth issues—certainly not enough progress to decrease materially the threat of continued currency wars. Yes, they said all the right things about moving toward “more market determined exchange rate [...]
The US Federal Reserve is preparing what could turn out to be one of its greatest follies since its defense of the gold standard during the Great Depression. Ben Bernanke, the Fed chairman, has signaled that next month the central bank could begin the process of printing hundreds of billions of dollars to buy US [...]
Why has China moved to raise interest rates? And is there any connection between its monetary policy actions, which surprised global markets, and whether China is willing to let its currency appreciate? Was this an either/or choice? The answers to these questions are not simple, but first one needs to look at the record of [...]
If the European financial, economic, and budget crises of the last two years have proven anything, it is that the famous Stability and Growth Pact (SGP) established in 1997 turned out to be nearly useless as an instrument of discipline. This week the European Union’s finance minister, basically agreed to keep it that way. Meeting [...]
The chaos that followed Lehman Brothers’ collapse two years ago hit financial systems in the United States and Europe with similar violence. But the consequences were not symmetrical. Several large financial institutions disappeared in the United States, partly because of stringent disclosure requirements, leading to immediate restructuring of the financial landscape. In the spring of [...]
French labor unions are preparing to block President Nicolas Sarkozy’s proposal to raise the French retirement age by two years.1 They plan open-ended strikes to shut down France’s transport and energy infrastructure, hoping to repeat their success in 1995 when street protests forced President Jacques Chirac and Prime Minister Alain Juppe to abandon their proposals [...]
As the International Monetary Fund and World Bank played host to the world’s finance ministers and central bankers in October, Dominique Strauss-Kahn was the model of the “activist IMF managing director” when he dared to address a question other Europeans prefer to ignore. What is to be done about Greece’s debt problems in the long [...]
The G-20 leaders’ meeting in Seoul should endorse a series of steps to move the International Monetary Fund (IMF) closer to becoming an international lender of last resort. The classic lender of last resort has the capacity (1) to lend unlimited amounts of funds to solvent institutions (2) on appropriate terms. Thus, to transform the [...]
As the recovery stalls in advanced countries, central banks are leaning more and more toward quantitative easing, a form of monetary stimulus that could provide a tool to help the economy as public opinion turns against more government spending. Japan implemented its plan in early October, and in the United Kingdom Adam Posen, senior fellow [...]
The following was posted this week by David Leonhardt on the website of The New York Times. Mr. Leonhardt, a New York Times columnist, asked Mr. Posen to elaborate on his speech “The Case for Doing More,” delivered to the Hull and Humber Chamber of Commerce, Industry, and Shipping on Sept. 28, saying it was [...]