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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.
Irish voters took their democratic vengeance last Friday on the government that had led Ireland through its big boom and then over the cliff into economic disaster and fiscal servitude to new European Union and International Monetary Fund overlords. And "kick the bums out" they certainly did, with the main governing Republican Party (Fianna Fail) [...]
Revolutions are euphoric events. Politics engage all as never before or after, and few bother to think about such mundane issues as economics, but then economic hazards will arise. Unfortunately, serious macroeconomic destabilization is likely in Egypt. The Egyptian revolution appears to be a middle-class, liberal revolution like the European revolutions of 1848 or the [...]
The recent overthrow of President Mubarak offers great hope for Egypt’s future political development. But the challenge of economic transformation will be no less important, and arguably as difficult. This challenge is viewed as one of achieving greater globalization and a greater role for markets inside Egypt. The more fundamental challenge, however, is different. Some [...]
With Portuguese interest rates above the 7 percent level at which their sovereign debt—even if it is considerably lower than that of say Greece—becomes unsustainable, the point in time at which the country will be forced to accept an EU-IMF financial assistance package looks imminent. It is increasingly evident that the Portuguese government’s attempt to [...]
President Sarkozy of France, current head of the G-20, has slipped comfortably into France’s traditional role of calling for fundamental reform of the international monetary system (IMS). On February 19, the G-20 finance ministers and central bank governors met in Paris and dutifully laid out a work program “aimed at strengthening the functioning of the [...]
The City of London, Europe’s main financial hub, has benefited throughout most of the late 1990s and the 2000s from a peculiar combination of factors. It gained hugely from European financial integration, spurred by the European Union’s efforts to create a single market for financial services and by a worldwide trend towards removing cross-border financial [...]
The dominant short-term economic problem today is the contrast between the prosperity of most emerging markets/developing countries and the excess capacity in most of the advanced economies (the principal exceptions being Australia and Sweden). No one begrudges the success of the poorer countries in starting to catch up, but they gain nothing (and lose a [...]
World leaders are calling for Hosni Mubarak to either resign or to institute “political and economic” reform that will meet the demands of the demonstrators. Such calls show a large degree of ignorance about the needed economic reforms and the fact that increasing political participation may pose obstacles to reforms. While the maintenance of deeply [...]
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 European Union Council, meeting in the first week of February, did not produce the “comprehensive long-term solution” to the eurozone’s debt crisis that some had hoped. Yet, EU leaders did agree on a deadline to produce their version of such a solution at the next Council in late March 20111, and they offered the [...]