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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.
Given the scale of India’s slowing rate of growth and other economic difficulties, there was one and only metric by which the new budget presented on February 28 would and should be assessed. Had this United Progressive Alliance (UPA) government fundamentally repudiated fiscal populism because it believed that such populism was no longer electorally popular? [...]
Industrial policy, in which governments seek to support certain industrial sectors, has made a comeback. It has attracted new respectability with the economic rise of China. Justin Lin, the recently departed World Bank chief economist, has made the intellectual and empirical case for industrial policy. The essence of his industrial policy is to identify comparative [...]
The leaders of euro area countries made an unprecedented commitment when they issued a statement on June 29 starting with the words, “We affirm that it is imperative to break the vicious circle between banks and sovereigns.” This statement officially acknowledged their intention to break the “doom loop” of mutually reinforcing deterioration of credit conditions [...]
In his 2010 book, Beyond the Crash: Overcoming the First Crisis of Globalization, former Chancellor of the Exchequer and Prime Minister Gordon Brown took great pride in his fiscal stimulus in early 2009. His intention, as that of all well-meaning Keynesians, was laudably to increase output. However, the United Kingdom has persistently underperformed in terms [...]
Unexpectedly, Slovenia is going through a financial crisis despite a record of sound behavior on many fronts. Its government bond yields surged above 7 percent in August, and the country is having trouble maintaining access to international financial markets. The question today is whether Slovenia will join the roster of countries needing a bailout program [...]
Let’s break out the booze and have a ball if that’s all there is. – From the song “Is That All There Is?” by Jerry Leiber and Mike Stoller At Jackson Hole last week, Federal Reserve Chairman Ben Bernanke provided more detail on the “costs and risks” he had cited in his June Federal Open [...]
As economic and financial pressures rise in the euro area, the commentary often suggests that an economic collapse and an outgrowth of extremist political forces reminiscent of the 1930s are upon us. These alarmist analogies come from two groups of people. Some are global hedge fund specialists whose “tail-end event risk franchises” require predictions of [...]
Is the decade-old Indian growth miracle over? India’s latest growth number of 5.3 percent for the first quarter of the current fiscal year prompts that worrying question. It falls short of two important benchmarks in India: It is 3 to 4 percentage points below the growth in China, and, critically, it is almost 4 percentage [...]
Reauthorization of the Export-Import Bank is stalled in Congress because of opposition from odd bedfellows. The issue has been addressed previously in this forum, but in this posting a solution to the impasse is offered that could clear the way for funding a vital federal program. Before we get to that drama, it’s worth considering [...]
If one is to judge by the Italian public finance data released on December 10 by the National Institute for Statistics (ISTAT), Italy is on the path to adjustment. In the third quarter of 2011 the general government net borrowing has been 2.7 percent of GDP, down from 3.5 percent in the corresponding quarter of [...]