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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.
In Jackson Hole last week, Christine Lagarde, the new managing director of the International Monetary Fund (IMF), decided to step on the toes of her former colleagues at the top of Europe’s financial policymaking community. This is good news. It illustrates that Lagarde, a former finance minister of France, is evidently not treating Europeans with [...]
The recent disappointing re-estimates for US GDP growth in the first half of this year, which were released in July, generated considerable discussion this summer, especially in political circles. No less striking, however, were some less well publicized revisions in the numbers for 2009 and 2010, which have raised doubts in my mind about the [...]
Is China poised to take over from the United States as the world’s most economically dominant power? This is an essential question, and yet it has not yet been taken seriously enough in the United States, where, this central conceit still reigns: The United States’ economic preeminence cannot be seriously threatened because it is the [...]
Sometimes old promises come in handy. European Union Commissioner Olli Rehn must be pleased that back in June he promised to prepare a “feasibility study” before the end of the year on the topic du jour in Europe, namely eurobonds.1 As the European Commission will soon forcefully wade into Europe’s imminent and far-reaching debate about [...]
European crisis management usually consists of avoiding the worst outcome. Yet in five decades the continent has established the most successful example of a politically and economically integrated region in the world. Now, as it becomes clear to European policymakers that avoiding the worst outcome for the euro (e.g., a break up of the euro [...]
The second half of 2011 opened with a boatload of bad economic news: rolling sovereign debt crises in Europe, a downgrade in the US credit rating, a sputtering economy, little growth in jobs, weak housing prices, and a plunging stock market. Can President Obama turn this picture around in time for the 2012 campaign? In [...]
The sense of despair enveloping American politics seems to be at an all-time high. But a lesson from the past, counseling that it really is possible to work together during a crisis, is being delivered this week, following the death of the most creative, resilient, and gutsy political leader I have ever known, former Governor [...]
Henry Kissinger once said that while "the illegal we do immediately, the unconstitutional takes a little longer."1 Perhaps this is why it took the European Central Bank (ECB) until this week to begin buying up Italian and Spanish bonds in the euro area secondary bond markets. The ECB’s initial hesitation stemmed from its understandable reluctance [...]
Despite the claim that last week’s jobs numbers were “better than expected,” they were in fact an abysmal indictment of US economic policy over the past two years. The unemployment rate has remained near or above 9 percent for 28 consecutive months, a policy failure not seen since the Great Depression of the 1930s. Unfortunately, [...]
The recent drama over whether the United States would default has weakened confidence in the American economy and underscored the already growing desire of many investors around the world, including many central bankers, for more diversity in their portfolios. Indeed, even policymakers in the United States might agree that the US dollar is vastly over-weighted, [...]