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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 Sunday the Tokyo Electric Power Company announced that they had found puddles at the damaged Fukushima nuclear facility’s No. 2 reactor containing extraordinarily high levels of radioactivity—10 million times higher than would be found in water in a normally functioning nuclear reactor. Thirty minutes later they retracted the statement. Thankfully the markets were closed [...]
The euro area sovereign debt crisis is gradually turning into the best thing that has happened to European Union politics and European economies since the launch of the Single Market in the mid-1980s. The crisis has shattered the fake ten-year political and economic equilibrium between core and periphery countries that followed the initial shock of [...]
Just after the Lehman Brother collapse, financial regulatory reform was at the top of the global agenda, and it dominated the discussion at the first summit of G-20 leaders in November 2008. By contrast, it was little more than an afterthought in the last G-20 meeting in Paris last month. Many observers fret that the [...]
The government of Japan has announced a preliminary estimate of earthquake damage recovery costs of 25 trillion yen ($309 billion) over three years, or about 5 percent of current GDP, double the Kobe quake and nearly four times more than Hurricane Katrina. This estimate follows on the heels of a somewhat lower estimates collected by [...]
While Japan appears to be making progress in resolving the situation at the damaged Fukushima nuclear power facility, the idiosyncrasy of the Japanese power grid and the nuclear industry’s checkered history could contribute to further undermining the struggling government’s already shaky credibility. In the words of one young Japanese woman acquaintance, "I don’t trust them [...]
I Introduction As the impact of the Great Recession gradually recedes on both sides of the Atlantic, political and economic attention will invariably shift toward prospects for renewed job creation. This paper will show how, in contrast to the outcome of earlier recessions, European labor markets have weathered the effects of the Great Recession noticeably better [...]
The outcome of the euro area meeting last week was far more substantive than expected, even if one takes into account that the expectations had been at rock bottom. Not only did European Union (EU) leaders demonstrate how they intend to prevent peripheral defaults, they also gave us an idea of their longer-term solutions for [...]
The earthquake and tsunami that devastated the Tohoku region of northern Japan took place against a challenging economic backdrop for Japan. Before tragedy struck, the country was already facing a slowing economy, fiscal strain, and deflation. The costs of this disaster are still being counted, and the nuclear power plants represent a wildcard. Yet rebuilding [...]
On March 7-8, the International Monetary Fund organized a major conference on macroeconomics in the wake of the global financial crisis. IMF chief economist Olivier Blanchard led the proceedings. This event drew prominent speakers at a time when the fund is engaging in a reconsideration of macroeconomic policies. What struck me, however, was the contrast [...]
Protests in the Middle East continue to rage even in Egypt and Tunisia, where the ruling regimes have been toppled. Throughout the region, activists and opposition leaders are demanding an overhaul of political systems. Though generalizations are difficult, it is clear that—whether the unrest is in Tunisia, Egypt, Libya, Bahrain, Algeria, Morocco, Oman, or elsewhere—the [...]