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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 deadline before a deadline before a deadline. The political brinkmanship in the euro area crisis has clearly reached new levels in recent weeks, culminating in the vote in Greece’s Parliament on June 29 to accept a tough austerity package in return for new loans to avert a default. The vote demonstrated that for all [...]
With the United States throwing its support behind Christine Lagarde for the post of managing director of the International Monetary Fund (IMF), it seems that it is all over, except for the shouting (or rather the whim of the French magistrate investigating her role in the Bernard Tapie affair). This result is unfortunate in one [...]
On June 30, the International Monetary Fund (IMF) will release an update of its Currency Composition of Official Foreign Exchange Reserves (COFER) database. The most recent release on March 31 indicated that over the eight quarters to the end of 2010, the dollar’s quantity share of all countries’ foreign exchange reserves had decreased by a [...]
The G-20 Agriculture Ministers met in Paris last June 22 and 23 to tackle the issue of food price volatility with the goal to improve food security. The Ministerial Declaration "Action Plan on Food Price Volatility and Agriculture" is a 24-page document whose main objectives are: 1) improve agricultural production and productivity to respond to [...]
Discourse in the financial press and among officials involved in assisting Greece in recent weeks has focused on the merits, mechanics and modalities of private sector involvement in a new Greek aid package. The question has been whether the holders of Greek government bonds should accept an extension of maturity or some other form of [...]
The euro area crisis is in its 18th month. The conflagration continues to blaze. Rather than constructing a firewall to protect euro area countries other than Greece, European authorities have allowed the flames to spread to Ireland and Portugal and threaten Spain as well. What went wrong? The leaders of the euro area have not [...]
Recent news suggested that the current Greek center-left Panhellenic Social Movement (PASOK) government might morph into a national unity government including the main Greek center-right New Democracy Party and possibly several technocratic ministers. Some reports say further that Prime Minister George Papandreou might step down in the process,1 though he announced on Wednesday that he [...]
One of the most memorable quotes of the financial crisis was delivered by German Chancellor Angela Merkel in May 2010, when she declared that "in a way, it is a struggle between politics and the markets. We must re-establish the primacy of politics over the markets." Though unusually stark, this formulation echoes a widespread perception [...]
The office of the US Trade Representative has taken the little noticed but highly unfortunate step of blocking Jennifer Hillman’s second term on the WTO Appellate Body. This is a bad omen, both for the World Trade Organization and the United States. The Appellate Body (AB) decides appeals from panel decisions in trade disputes. Since [...]
The familiar tools of economic stimulation have run out of gas. Fiscal policy will contract when a political compromise is reached to raise the debt ceiling (probably by $2 trillion) and simultaneously cut spending (again by $2 trillion, spread over 10 years). The Fed can’t lower short term interest rate below zero, and if it [...]