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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.
Within the space of two days, the Indian government, spearheaded it appears by the Finance Minister, P. Chidambaram, has taken a series of policy steps to get India out of the funk it had been sliding into. First, it enacted measures to reduce fuel subsidies on diesel and limit the subsidy on cooking gas. Second, [...]
One of the biggest questions of the coming decade is whether global economic and financial integration will continue or go into reverse as the consequences of the financial crisis unfold. Much public discussion focuses on trade and capital controls, but the outlook for foreign direct investment, including cross-border corporate acquisitions, is just as important. In [...]
On February 19, 2010, the International Monetary Fund released a “Staff Position Note” on capital controls as a policy instrument.1 The paper concluded that, subject to four conditions, controls on capital inflows can be justified. The four conditions are: the economy is operating near potential, there is an adequate level of reserves, the exchange rate [...]
We tend to think of globalization in the following way: the rich world exports financial capital, technology, sophisticated goods, and entrepreneurial and managerial skills in the form of foreign direct investment (FDI) to developing countries; the latter, in turn, export people, resources, and low-skilled goods to the rich world. Well, it turns out that globalization [...]
Are multinational corporations in the United States relocating their manufacturing sites overseas, abandoning workers and communities at home? And are their investments abroad “hollowing out” America’s productive capacity? At a time of global economic and financial turmoil, these questions are as controversial as ever. The 2008 election rekindled the debate over the practices of multinational [...]