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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.
Duly prodded by the accelerating financial-market rout across the euro area, political leaders have begun positioning themselves for what should—indeed must—be the final stage of the euro area political response to the sovereign debt crisis due to be launched at the upcoming EU Summit in December. Europe is getting close to having its “second TARP [...]
The euro area debt crisis has many paradoxes, but surely one of the more ironic ones is that as the 17 members in the euro area desperately search for a solution to their travails, American conservatives are determined to ensure that the next euro-type crisis will erupt in the United States. The GOP is thus [...]
The failure to reach a budget agreement by the US Congressional "super committee" says much about the American political system. Few individuals probably have a bigger stake in this failure than the president of Americans for Tax Reform (ATR), Grover Norquist, whose pledge [pdf] signed by 238 members and 41 senators of the 112th Congress [...]
Throughout modern economic history, every major financial crisis has been followed by premature abandonment—if not reversal—of the very stimulus policies necessary for sustained recovery. If the world is not to repeat that mistake, the Federal Reserve and the European Central Bank (ECB) must engage in further monetary stimulus, which today means purchasing additional government securities [...]
When Mario Draghi delivered his first prepared public remarks as president of the European Central Bank (ECB) in Frankfurt on Nov. 8, he provided several clues about the coming eight years. Conscious of taking charge in the midst of the bank’s and the euro area’s first major financial crisis, he dwelled first on monetary policy, [...]
The Washington branch of Occupy Wall Street has moved in recent days to block the structurally deficient Key Bridge, arguing that rebuilding bridges is the right way to create jobs for hundreds of thousands of unemployed construction workers. The Tea Party violently objects to deficit spending and higher taxes. These political poles should unite on [...]
The maiden speech of the new Italian prime minister, Mario Monti, has set out a comprehensive reform strategy to address the challenges facing his country. Monti has made clear that certain measures must be implemented as quickly as possible to create a favorable environment for growth, pursue a balanced budget, implement structural measures and distribute [...]
The euro crisis has been extensively discussed in terms of economics, finance, political intrigues, and European institutions, but a key aspect—the political economy of the crisis—has received little attention. Politicians and social scientists from emerging economies, not least from Eastern Europe, look with amazement at this oversight. Europeans need to absorb and apply the lessons [...]
“I guess you guys have to be creative here,” US President Barack Obama was reported as exhorting German Chancellor Angela Merkel at the Cannes Summit on November 4. This is an apt tagline for the current moment in the euro area crisis. The European Union needs to radically change its ways, or it may not [...]
The mid-November meeting of the Asia Pacific Economic Cooperation (APEC) forum produced some welcome news for the Trans-Pacific Partnership (TPP), a potential agreement that could clear the way for more trade and investment across the Pacific. Most important, three countries—Canada, Japan, and Mexico—announced that they would explore the possibility of joining the negotiations, which already [...]