News & Commentary:

April 2008 Archives


The Coming Financial Pandemic Foreign Policy Subscription Required Recommended!
Nouriel Roubini (FP) Mar/Apr 2008
The U.S. financial crisis cannot be contained. Indeed, it has already begun to infect other countries, and it will travel further before it’s done. From sluggish trade to credit crunches, from housing busts to volatile stock markets, this is how the contagion will spread.

Will Democracy Make You Happy? Foreign Policy Subscription Required
Eric Weiner (FP) Mar/Apr 2008
For decades, politicians and political scientists have clung to the notion that free nations breed happy people. Now, though, a new “science of happiness” is turning that equation on its head.

China and India Go to Africa
Harry G. Broadman (Foreign Affairs) Mar/Apr 2008
With South-South ties increasing, who cares about the North?

The Copenhagen Consensus
Robert Kuttner (Foreign Affairs) Mar/Apr 2008
Dynamic markets and strong welfare states are not mutually exclusive.

Transforming Nations
Peter D. Sutherland (Foreign Affairs) Mar/Apr 2008
How the prospect of WTO accession.

World Bank climate funds: "a huge leap backwards"
Bretton Woods Project Number 60 Mar/Apr 2008
Plus: The Bank, Brazil and biofuels; Leaky logic: dams in three countries; Forest carbon facility: more harm than good?; and more.

The Roots of America’s Financial Crisis
Jeffrey D. Sachs (Project Syndicate) Apr 2008
The US Federal Reserve’s desperate attempts to keep America’s economy from sinking are remarkable for at least two reasons. First, until just a few months ago, the conventional wisdom was that the US would avoid recession. Now recession looks certain. Second, the Fed’s actions do not seem to be effective. Although interest rates have been slashed and the Fed has lavished liquidity on cash-strapped banks, the crisis is deepening.

China’s Incredible Shrinking Economy
Eswar Prasad (Project Syndicate) Apr 2008
The World Bank recently announced that the Chinese and Indian economies are 40% smaller than previously estimated. Since these are the fastest-growing large economies, the Bank’s revision has clipped half a percentage point off world growth over the last five years, according to the IMF.

A Broad Asian FTA Will Bring Big Gains Far Eastern Economic Review Subscription Required  FEER Subscription Required
Masahiro Kawai and Ganeshan Wignaraja (FEER) Apr 2008
An Asean-led FTA that includes China, Japan and India will yield the greatest economic benefits.

The Hungry Billion
Sue Horton and Bjørn Lomborg (Project Syndicate) Apr 2008
Hunger has slipped from the rich world’s consciousness. Televised images of Third World children with distended bellies no longer shock viewers. Polls show that developed nations now believe that the world’s biggest problems are terrorism and climate change.

Goodbye to the Dollar?
Kenneth Rogoff (Project Syndicate) Apr 2008
As the world’s financial leaders meet in Washington this month at the World Bank-International Monetary Fund annual meeting, perhaps they should be glad there is no clear alternative to the dollar as the global currency standard. If the euro were fully ready for prime time, we might well be seeing it’s dollar exchange rate jump to over 2.00, and not just to 1.65 or 1.70, as it seems poised to do anyway. You can’t treat your customers as badly as the United States has done lately if they can go elsewhere.

Could the IMF Have Prevented This Crisis?
Hector R. Torres (Project Syndicate) Apr 2008
Until recently, the International Monetary Fund’s main job was lending to countries with balance-of-payment problems. Today, however, emerging countries increasingly prefer to “self-insure” by accumulating reserves (and sharing them through regional pooling arrangements). As a result, the Fund must change, reinforcing its supervisory role and its capacity to oversee members’ compliance with their obligation to contribute to financial stability. So its failure to press the United States to redress the mortgage-market vulnerabilities that precipitated the current financial crisis indicates that much remains to be done.

Preventing Europe’s Next Banking Crisis
Nicolas Véron (Project Syndicate) Apr 2008
As shockwaves from America’s subprime disaster continue to reverberate, there is growing doubt about Europe’s ability to handle a financial crisis on a major scale. Severe lapses in bank regulation – in Germany, Britain, and perhaps France – have damaged the credibility of national systems of supervision. But this is only part of the problem. The European Union remains hopelessly ill-equipped to handle the crises that haven’t yet happened: cross-border crises sparked by EU banks’ increasing interdependence.

Guns, Drugs, and Financial Markets
Dani Rodrik (Project Syndicate) Apr 2008
The sub-prime mortgage crisis has demonstrated once again how hard it is to tame finance, an industry that is both the lifeline of modern economies and their gravest threat. While this is not news to emerging markets, which have experienced many financial crises in the last quarter-century, a half-century of financial stability lulled advanced economies into complacency.

The Rise of the BRICs
Harold James (Project Syndicate) Apr 2008
The winners of the great globalization push of the 1990’s were small states such as New Zealand, Chile, Dubai, Finland, Ireland, the Baltic Republics, Slovenia, and Slovakia. The East Asian tigers that pushed themselves onto the world economy’s center stage were small units, and in some cases – Singapore, Taiwan, or Hong Kong – were not even treated as states. Even South Korea, which is a giant in comparison, was only half a country.

The Immigrant Gap
Matthew J. Slaughter (WSJ) Apr 1, 2008
April 1 is a critical day for immigration policy. Today, U.S. Citizenship and Immigration Services (USCIS) begins accepting new H1-B visa petitions for the next fiscal year.

Rush to restrict trade in basic foods
FT Apr 1, 2008
Governments across the developing world are scrambling to boost farm imports and restrict exports in an attempt to forestall rising food prices and social unrest

The prudent will have to pay for the profligate
Martin Wolf (FT) Apr 1, 2008
On the upside, the fairy government-mother stood on the sidelines, applauding the enthusiasm of her charges. On the downside, she is dragged in, as risk-addiction turns into risk-aversion.

Stocks rise in spite of fresh bank woes
FT Apr 2, 2008
Global stock markets rebounded sharply, stirring debate about whether investors were growing more confident or just retreating from trading strategies that profit from falling prices Read more »

Beyond Balassa-Samuelson in Visegrad-4 Countries
Balázs Égert & Jirí Podpiera (VoxEU) Apr 2, 2008
European economies catching up to the rest of the euro area suffer from higher inflation. The conventional structural explanation – the Balassa-Samuelson effect – doesn’t match the data, causing some to argue that cyclical effects must be driving economic differences. But the authors of CEPR Policy Insight 20 argue that structural changes – important improvements in product quality – may explain the phenomenon.

False ideology at the heart of the financial crisis
George Soros (FT) Apr 2, 2008
The US authorities still do not get the point about this financial crisis – the markets are not self-correcting. New thinking is needed.

Why the euro is unlikely to eclipse the dollar
Barry Eichengreen and Marc Flandreau (FT) Apr 2, 2008
Reports of the dollar's death are based on a model of demand that does not apply to our 21st-century world.

Congress Must Step Up Oversight Activity, Act on Trade Deal
Norman J. Ornstein (AEI) Apr 2, 2008
Congress should focus on executive department oversight and passage of the Colombia Free Trade Agreement.

WTO Panel Rules Against EU Import Ban in Beef Hormone Case; Both Sides Claim Victory
BRIDGES Weekly Trade News Digest - Vol. 12, Number 11 Apr 2, 2008
Both sides are claiming victory following the latest WTO ruling in one of the longest running disputes in the institution's history, which has pitted the US and Canada against the EU over trade in hormone-treated beef.

Hitch on Sensitive Ag Products Delaying Rest of Doha Talks
BRIDGES Weekly Trade News Digest - Vol. 12, Number 11 Apr 2, 2008
Continuing disagreement among a dozen-odd WTO Members on how to expand trade in 'sensitive' farm products is holding up discussions in the ongoing push for a deal in the struggling Doha Round of global trade negotiations.

Global: More Global, Less Local
Manoj Pradhan (MSDW) Apr 3, 2008
We believe that the structural factors we have identified will drive inflation and inflation expectations higher, pushing up breakeven inflation and putting pressure on central bank inflation targets.

Commodity Price Boom, Better Policies Spur Globalization
IMF Survey Apr 3, 2008
Developing and emerging economies have become significantly more integrated into the global economy in recent years, against the backdrop of soaring commodity prices and steadily improving institutions and policy frameworks, according to the IMF's April 2008 World Economic Outlook

Last chance for the US to shape the new global order
Philip Stephens (FT) Apr 3, 2008
Foreign policy issues are piling up for the next US president. The urgent must be separated from the important, but the big risk faced by the new president will be of being overwhelmed by the avalanche of problems demanding instant decision.

The World's Biggest Companies
Forbes Apr 4, 2008
Our annual compendium of the largest public companies on the planet.

A long term perspective on the Euro
Michael Bordo & Harold James (VoxEU) Apr 4, 2008
The euro may surpass the dollar in coming decades to become the leading international currency. This column summarises four major challenges that the euro must survive for that to come true.

Why bank risk models failed
Avinash Persaud (VoxEU) Apr 4, 2008
Financial supervision arguably failed to prevent today’s turmoil because it relied upon the very price-sensitive risk models that produced the crisis. This column calls for an ambitious departure from trends in modern financial regulation to correct the problem.

Taking On the World
Michael S. Malone (WSJ) Apr 5, 2008
The U.S. needs to take global competition seriously. Here's how.

IMF head calls for global action on turmoil
FT Apr 6, 2008
Government intervention at a global level is required to tackle the credit crisis, according to Dominique Strauss-Kahn, the head of the International Monetary Fund, who has warned that market turmoil will take a serious toll on world growth.

When Foreigners Buy Factories: 2 Towns, 2 Outcomes
NYT Apr 7, 2008
The consequences of foreigners buying U.S. companies offer competing narratives for a nation still uneasy about being on the selling end of the global economy.

The Vatican and Globalization: Tinkering With Sin
NYT Apr 7, 2008
It's hard to rejigger the rules when truth is meant to be fixed forever.

Grains Gone Wild
Paul Krugman (NYT) Apr 7, 2008
How did the food crisis happen? The answer is a combination of long-term trends, bad luck -- and bad policy.

The Dollar Smile and the Fall Lines of Dominos
Stephen Jen (MSDW) Apr 7, 2008
We elaborate on the four ‘fall lines’ of the currency dominos, as the global economy gradually recouples to the US. As this happens, the dollar could finally start to ‘smile’ as the currency dominos fall.

Why Is the EUR So Strong: A New Hypothesis
Stephen Jen (MSDW) Apr 7, 2008
Since 1999, Euroland’s financial ‘home bias’ has increased significantly. We believe that this has been a key distortion in the international financial markets and a main reason behind the EUR’s over-valuation.

Board Backs Plan to Adopt New Income Model for IMF
IMF Survey Apr 7, 2008
Managing Director Dominique Strauss-Kahn applauded an agreement by the Executive Board to propose a new and sustainable income and expenditure framework for the IMF, calling it "a landmark decision that will put the institution on a solid financial footing."

IMF to Review World Outlook, Set Seal on Reform Plans
IMF Survey Apr 7, 2008
Top world financial officials will discuss worries about the outlook for the global economy, triggered by a slowdown in the United States, and are expected to endorse reform plans for the IMF during the IMF-World Bank Spring Meetings on April 12-13.

The political threats to globalisation
Gideon Rachman (FT) Apr 7, 2008
Hunger – that most traditional threat to ruling elites – is returning to many countries that have embraced globalisation. Along with other mounting pressures, it could come to undermine the free-trade consensus built up over the past 30 years.

Asian Inflation Begins to Sting U.S. Shoppers
NYT Apr 8, 2008
For two generations, Americans have imported goods produced ever more cheaply from a succession of low-wage countries. But that free ride may be coming to an end.

Lobby for Colombia Trade Pact Casts a Wide Net
NYT Apr 8, 2008
A campaign for a trade deal with Colombia has former Clinton administration aides aligned with Republicans.

Credit Crisis Is Broadening, IMF Warns
IMF Survey Apr 8, 2008
The credit crisis, triggered by the U.S. subprime mortgage meltdown, is spreading to other mortgage and corporate debt markets and could have profound financial system and macroeconomic implications, according to the IMF's latest Global Financial Stability Report.

The indiscreet charm of sovereign wealth funds
Paul Betts (FT) Apr 8, 2008
These funds are undoubtedly the new actor on the international financial block. As long as they adhere to accepted standards of good behaviour and best practice, they should be given the same fair treatment as any other investor, the OECD insists.

How Europe can shape the Fund
Domenico Lombardi and Jim O'Neill (FT) Apr 8, 2008
With the single currency rising on the dollar, it is time for the zone to adopt a global leadership position.

Volcker's Demarche
WSJ Apr 9, 2008
The former Fed chief says we're already in a 'dollar crisis.'

Colombia and Cat
WSJ Apr 9, 2008
A case study in trade and union workers.

IMF Outlines Three Lines of Defense for Global Economy
IMF Survey Apr 9, 2008
Faced with a slowing world economy and continued fallout from the subprime crisis that is affecting global markets, the IMF has outlined three lines of defense for countries to limit the impact of the slowdown.

Germans agree on sovereign fund law
FT Apr 9, 2008
The ruling coalition has cleared the way for measures to block unwanted investments by foreign sovereign wealth funds after differences on the move were resolved.

Basel II is sophisticated and sorely needed
Nout Wellink (FT) Apr 9, 2008
The framework will require banks to develop approaches to assessing, managing and holding adequate capital for risks.

Help poor states to seize the fruits of the boom
Paul Collier and Michael Spence (FT) Apr 9, 2008
The challenge is to invest public savings productively within the countries that own natural resources, in education and infrastructure Read more »

Banks take blame for credit crisis
FT Apr 10, 2008
The world's leading banks publicly accepted much of the blame for the credit crisis, as the International Monetary Fund slashed its estimates for global growth and warned that the US downturn will last longer than most people expect

Renminbi rises to high against US dollar
FT Apr 10, 2008
The Chinese currency traded stronger than 7 to the US dollar for the first time in over a decade, underlining China's growing economic strength and its increasing use of the currency as a policy tool

The World Food Crisis
NYT Apr 10, 2008
The United States and other developed countries need to step up to the plate to help solve the problem of rising food prices.

Global: All Easy in EM
Joachim Fels & Manoj Pradhan (MSDW) Apr 10, 2008
We extend our natural, or neutral, interest rate estimates to the four largest EM economies and find that actual real short rates are way below their likely neutral levels in China and Russia and also seem to be in expansionary territory in India. Only in Brazil are rates still above our rough estimate of neutrality.

A coming test of virtue
Economist Apr 10, 2008
Once a byword for financial busts, Latin America has so far escaped this credit crunch unscathed. But for how much longer?

Danger ahead for the mighty euro
Economist Apr 10, 2008
Euro-zone economies face external woes and internal tensions.

Danger ahead for the mighty euro
Economist Apr 10, 2008
Euro-zone economies face external woes and internal tensions.

IMF rejects criticism over global turmoil
FT Apr 11, 2008
The International Monetary Fund on Thursday rejected claims that it should have better foreseen the onset of a global financial crisis and instead singled out the US for refusing to adopt its ­programme to improve the stability of national economies.

Politics and trade: evidence from the age of imperialism
Kris James Mitchener (VoxEU) Apr 11, 2008
Institutions play a central role in determining trade flows. Evidence from the age of high imperialism suggests that political relationships can be as powerful at dictating trade flows as geography and other institutional factors, such as currency unions or widespread fixed-exchange rate regimes like the gold standard.

Doha Dealbreaker
Simon Crean and Susan Schward (WSJ) Apr 11, 2008
Free trade in services must be part of the agreement.

WTO Members Reach 'Moment of Truth' on Sensitive Farm Products
BRIDGES Weekly Trade News Digest - Vol. 12, Number 12 Apr 11, 2008
A handful of key agricultural exporters and importers have reached an outline agreement on expanding trade in 'sensitive' farm products as part of the Doha Round global trade talks.

US Democrats Vote to Indefinitely Suspend Action on Colombia FTA
BRIDGES Weekly Trade News Digest - Vol. 12, Number 12 Apr 11, 2008
Earlier this week, the Bush administration took a gamble: it sent a free trade agreement with Colombia to the US House of Representatives for consideration, in the face of objections from the leaders of the Democratic majority.

Food Prices Stir Poverty Concern Apr 11, 2008
Subsidized biofuels trigger food shortages and riots, while doing little to slow climate change

Are Global Imbalances Due to Financial Underdevelopment in Emerging Economies?
Diego Valderrama (FRBSF Economic Letter) Apr 11, 2008
Though much of the current discussion about global imbalances focuses on the swelling current account deficit in the U.S., the other side of this imbalance itself presents a puzzle. Specifically, the increase in U.S. international liabilities must be matched by an increase in assets elsewhere, and, in the current environment, a prominent "elsewhere" is among emerging Asian economies. For example, according to the World Economic Outlook (IMF 2007), in 2006 emerging Asian countries (including China, India, South Korea, and Singapore) accumulated $373.9 billion in reserves, a large portion of which is in the form of U.S. Treasury securities and other dollar-denominated assets. At the same time, these emerging-market countries also have relied to a large degree on private foreign direct investment (FDI) to finance domestic firms, receiving $40.5 billion in net private inflows (including FDI and portfolio equity investment) that year. So the puzzle is, why would emerging-market countries rely so heavily on foreign equity capital to finance the operations of local firms when they have access to a large pool of domestic savings that they are lending to the rest of the world?

High oil prices and the return of “resource nationalism”
Sergei Guriev, Anton Kolotilin & Konstantin Sonin (VoxEU) Apr 11, 2008
The rising price of oil has been accompanied by nationalisations of oil assets, and the relationship is no mere coincidence. Recent research shows that higher oil prices trigger expropriations, particularly in countries with weak political institutions.

G-7 Endorses Proposals Intended to Ease Crisis
WP Apr 12, 2008
Top economic officials from the world's major industrial countries yesterday embraced a set of proposals aimed at increasing the transparency of banks and other financial institutions in hopes of calming tumultuous global markets.

G-7 Expresses Support for IMF Reform
IMF Survey Apr 12, 2008
A communiqué following an April 11 meeting of the Group of Seven industrial countries' finance ministers and central bank governors in Washington reaffirms "the important role for the IMF in securing global financial stability" and endorses "significant progress on IMF reform."

The Rise of the Mega-Region
Richard Florida (WSJ) (2008)
When people talk about economic competitiveness, the focus tends to be on nation states. In the 1980s, many were obsessed with the rise of Japan. Today, our gaze has shifted to the phenomenal growth of Brazil, Russia, India and China. But this focus on nations is off the mark.

Lamy: Doha Round conclusion will reassure world financial markets
WTO Apr 12, 2008
Director-General Pascal Lamy, in his intervention at the International Monetary and Financial Committee meeting on 12 April 2008 in Washington, urged financial leaders to push “now” for the conclusion of the Doha Round. He said: “I am completely convinced that we have it within our means, politically and technically, to finish the Doha Round this year. To do so, the first step we need is for WTO Member governments to agree at Ministerial level by the end of May on the framework for cutting agricultural tariffs, agricultural subsidies and industrial tariffs.”

Pessimism about the eurozone is misplaced
Wolfgang Münchau (FT) Apr 13, 2008
Maybe we are now living in a world where the US is catching a cold and the Europeans are sneezing.

Do not regulate wealth funds, improve them
Knut Kjaer (FT) Apr 13, 2008
Fund managers should acknowledge the need for specialised financial skills. External managers are no substitute.

Finance Ministers Emphasize Food Crisis Over Credit Crisis
NYT Apr 14, 2008
The world's economic ministers declared on Sunday that shortages and skyrocketing prices for food posed a potentially greater threat to economic and political stability than the turmoil in capital markets.

Currencies: The Rise and Fall of Intra-EMU Diversification
Stephen Jen (MSDW) Apr 14, 2008
Improved liquidity and the depth of Euroland’s capital markets encourage a higher home bias. However, over time, with economic and financial convergence, the benefits of diversifying out of the EMU should rise. We therefore see the EMU’s financial home bias eventually declining, removing a source of support for the EUR.

Dollar Alarm
WSJ Apr 14, 2008
The G-7 finance ministers rediscover currency risk.

Unions for Free Trade
WSJ Apr 14, 2008
Why Colombia's labor leaders want an FTA.

Even a slowdown brings some good news
FT Apr 14, 2008
I am not convinced that the turmoil in financial markets will push the world over the edge of the economic precipice, writes Philip Stephens

WTO negotiators have 'basis of a deal' on agricultural products
IHT Apr 14, 2008
World Trade Organization negotiators have reached the "basis of a deal" on how to treat politically sensitive agricultural products, the European Union trade commissioner, Peter Mandelson, said Monday.

Fuel Choices, Food Crises and Finger-Pointing
NYT Apr 15, 2008
Biofuels are fast becoming a new flash point in global diplomacy, putting pressure on Western politicians to reconsider their policies.

Delta and Northwest in $3 Billion Deal
NYT Apr 15, 2008
The boards of Delta Air Lines and Northwest Airlines announced a deal late Monday that will create the world's biggest airline and probably trigger other airlines to pursue mergers of their own.

Oil prices surge to a new high
IHT Apr 15, 2008
Oil rose past $114 a barrel at one point on Tuesday, as pipeline interruptions and a weak dollar pressured a tight global market.

India's Game, U.S. Spice
Tunku Vandarajan (NYT) Apr 15, 2008
How paradoxical, and delightful, that Bangalore, a city that has leapt to global prominence on the back of work outsourced by America, is now itself outsourcing from America.

White-Collar Outsourcing: Myth Vs. Reality
Jacob Kirkegaard (Globalist) Apr 15, 2008
Are white-collar jobs in the United States as imperiled as blue-collar jobs?

Enough With the Interest Rate Cuts
Martin Feldstein (WSJ) Apr 15, 2008
At this point they're only fueling inflation and political instability around the world.

Why financial regulation is both difficult and essential
Martin Wolf (FT) Apr 15, 2008
A voluntary banking code is almost certainly not worth the paper it is written on. If regulation is to be effective, it must cover all relevant institutions and the entire balance sheet and, not least, it must make finance less pro-cylical.

Marching Backward On Trade
Robert J. Samuelson (WP) Apr 16, 2008
On trade, many Democrats -- and some Republicans, too -- are fighting the last war.

A modest proposal for preventing world famine
Victor Mallet (FT) Apr 16, 2008
You do not need to be a neo-Malthusian to worry about the demands of a global population rising by 80m a year.

NAMA Chair: Members Finally Getting Ready For "A Real Negotiation"
BRIDGES Weekly Trade News Digest - Vol. 12, Number 13 Apr 16, 2008
WTO Members are still far from agreement on how to cut tariffs on manufactured goods, the chair of the Doha Round negotiations on non-agricultural market access acknowledged this week.

Global: Diverging Policy Paths
Joachim Fels & Manoj Pradhan (MSDW) Apr 17, 2008
Monetary policy paths are still diverging, with a major dichotomy between EM central banks – especially in EMEA and, to some extent, Latin America – battling against strong inflation pressures on the one hand and advanced economies affected by housing slowdowns and the financial crisis on the other.

Membership Has Its Privileges
Fredrick Erixon & Brian Hindley (WSJ) Apr 17, 2008
Ukraine became the latest former Soviet republic admitted to the World Trade Organization in February, joining the Baltics, Georgia, Moldova and Kyrgyzstan. These states have embraced open trade and market-oriented economic policies – and, in WTO membership, the best available guarantee that those policies will be maintained. All the other former Soviet states are still trying to show that they belong in the club (except for Turkmenistan, which has not applied for membership).

Krugman's conundrum Recommended!
Economist Apr 17, 2008
The elusive link between trade and wage inequality.

Across Globe, Empty Bellies Bring Rising Anger
NYT Apr 18, 2008
Global food prices are spiraling out of reach, sowing volatile levels of discontent and putting new pressures on fragile governments.

Eight hundred years of financial folly
(VoxEU) Apr 19, 2008
In the context of the last thirty years, the present period appears to be unlikely to produce a wave of sovereign debt defaults. But a new database spanning eight centuries reveals that history has many lessons for those studying financial crises. Contrary to conventional wisdom, today may not be very different.

Commodities and speculation: metallic (and other) evidence
Paul Krugman (NYT) Apr 20, 2008
We’ve had a huge runup in commodity prices — fuels, food, metals. But why? Broadly, the debate is between those who see it as a speculative phenomenon, driven by some combination of low interest rates and irrational exuberance, and those who see it as a collision of rapidly growing demand with constrained supply.

Global approach required to tackle food prices
Dominique Strauss-Khan (FT) Apr 20, 2008
Completing the Doha round is critical as it would reduce trade barriers and encourage agricultural trade.

Now is the time to reduce international trade and migration barriers
Kym Anderson & L Alan Winters (VoxEU) Apr 21, 2008
Current prospects for liberalisation of barriers to international trade and migration seem dim. In this column, the authors of the Copenhagen Consensus paper on global economic integration outline the magnitude of the gains that politicians are opposing.

Where's the Beef?
WSJ Apr 21, 2008
The only thing holding up a U.S.-Korea free-trade agreement is Democratic pandering.

Currencies: Q&A on the Reserve Currency Status of the USD
Stephen Jen (MSDW) Apr 21, 2008
We still see the USD likely remaining the dominant international currency for the foreseeable future. The most likely challengers to the USD will be the CNY or an Asian currency unit centred on the CNY. But the key precondition is that Asia manages to develop its financial markets.

Currencies: A Sibling Rivalry: Central Banks versus SWFs
Stephen Jen (MSDW) Apr 21, 2008
Nobody likes to have money taken from them, especially hundreds of billions of US dollars. Competition will likely grow between central banks and SWFs of the same countries regarding management of foreign assets. This should be unambiguously positive for global risky assets, particularly developed market equities.

Another BRIC in the wall
Economist Apr 21, 2008
The perils of overestimating emerging markets.

A turning point in managing the world's economy
Martin Wolf (FT) Apr 22, 2008
How do we persuade citizens the rise of the emerging countries, the brightest story of our era, is to be welcomed.

Next-Door Neighbors Back Bush on Expanding Trade
NYT Apr 23, 2008
Canada and Mexico lent their weight to President Bush's campaign to expand free trade within the framework of Nafta.

High Food Prices Leave Developing Countries Struggling to Cope
BRIDGES Weekly Trade News Digest - Vol. 12, Number 14 Apr 23, 2008
For over six years, negotiators from governments around the world have been haggling over cuts to farm subsidies and barriers to agricultural trade in talks at the WTO. Competitive exporters seeking greater liberalisation have met stiff opposition from countries determined to protect their farm sectors from the full force of international competition. The wrangling continues, as WTO Members push for a deal in the troubled Doha Round of global trade talks.

TNC: Lamy Says Horizontal Process "Coming Soon," But When?
BRIDGES Weekly Trade News Digest - Vol. 12, Number 14 Apr 23, 2008
WTO Director-General Pascal Lamy said last week that "solid progress" since February meant that governments were "now much closer to the finish line" in the troubled Doha Round talks. Nevertheless, it remains unclear whether ministers from around the world will be in a position to hammer out a framework global trade deal by the second half of May.

Globalization's Aftershocks
Temma Ehrenfeld (Newsweek) Apr 23, 2008
Lack of regulation allows the underworld to flourish, undermining globalization's advantages.

Better Roses Than Cocaine
Nicholas Kristof (NYT) Apr 24, 2008
For seven years, Democrats have rightfully complained that President Bush has gratuitously antagonized the world, exasperating our allies and eroding America’s standing and influence.

Trichet says U.S. needs to support dollar 'more than ever'
IHT Apr 24, 2008
The comments from the ECB chief came on the same day that surveys showed that German and French business morale fell sharply in April, depressed by high oil prices, a strong euro and market turmoil.

Food prices: The need for insurance
Esther Duflo (VoxEU) Apr 25, 2008
Rising food prices are hurting many poor people, but they are helping poor agricultural producers. Food price volatility, on the other hand, is bad for everyone. This column explains poor people’s need for food price variability insurance.

Why this crisis is still far from finished
Mohamed El-Erian (FT) Apr 25, 2008
Financial dislocations have now caused the real economy to become, in itself, a source of potential disruption.

Food and Free Trade
Nancy Birdsall & Arvind Subramanian (WSJ) Apr 25, 2008
How rising prices relate to trade barriers.

Currencies: Foreign Official Reserves Could Reach US$8 Trillion by Year-End
Charles St-Arnaud (MSDW) Apr 25, 2008
The world’s official reserves have now reached a level of US$6.6 trillion, and have grown by about 25% over the last year. At this rate, they could easily breach the US$8 trillion mark before the end of 2008. Japan has breached the US$1 trillion level in reserves and Russia could follow in about two years.

Deadly Greed: The Role of Speculators in the Global Food Crisis
Beat Balzli and Frank Hornig (Spiegel Online) Apr 25, 2008
Profit-takers in the commodities markets shrug about food riots and starvation.

In EU, free traders and protectionists set up for clash
IHT Apr 25, 2008
The way the European Union draws up its trade policy baffles many outsiders, and it is about to get more complicated when new powers are granted to the European Parliament.

Stem Rust Never Sleeps
Norman E. Borlaug (NYT) Apr 26, 2008
With food prices soaring throughout Asia, Africa and Latin America, and shortages threatening hunger and political chaos, the time could not be worse for an epidemic of stem rust in the world’s wheat crops. Yet millions of wheat farmers, small and large, face this spreading and deadly crop infection.

The New Economics of Hunger Recommended!
WP Apr 27, 2008
A brutal convergence of events has hit an unprepared global market, and grain prices are sky high. The world's poor suffer most.

Is Trade the Problem?
NYT Apr 27, 2008
Blaming Nafta and other trade agreements for American workers' pain may play well on the campaign stump. But it will not solve the country's economic problems.

What keeps Zhou Xiaochuan up at night
Brad Setser (RGE monitor) Apr 27, 2008
Friday’s Lex column highlighted the possibility that China’s real reserve growth may be far higher than the published increase in its reserves – and thus a lot more hot money may be flowing into China than the published increase in China’s reserves implies. Michael Pettis – drawing on the work of Logan Wright of Stone and McCarthy - and I have both published online estimates of the “true” pace of Chinese reserve growth. Wang Tao – formerly of the Bank of America – and Stephen Green of Standard Chartered have done similar work.

Global adjustment will be long and painful
Wolfgang Münchau (FT) Apr 27, 2008
Beware multiple crises could easily return like a bloodstained villain in a horror movie who rises to fight his last battle.

America needs to make a new case for trade
Lawrence Summers (FT) Apr 27, 2008
Since the end of the second world war, American economic policy has supported an integrated global economy, stimulating development in poor countries... Yet America’s commitment to internationalist economic policy is ever more in doubt.

Market power and trade policy
Bruce Blonigen (VoxEU) Apr 28, 2008
Though policymakers show great concern for market power when discussing antitrust policy, they neglect it when designing trade policies. This column summarises recent empirical research showing that some trade barriers impose significant costs on consumers by substantially raising the market power of domestic firms.

Saudis to launch $5.3bn sovereign fund
FT Apr 28, 2008
Saudi Arabia's Public Investment Fund is in the "final stages" of launching the kingdom's first sovereign wealth fund. But its early financial commitment will disappoint those hoping for another megafund.

Opec says oil could hit $200
FT Apr 28, 2008
Opec's president warned oil prices could hit $200 a barrel and there would be little the cartel could do to help.

Dollar hits two-month high against yen
FT Apr 28, 2008
The dollar hit a two-month high against the yen and held on to last week's sharp gains against the euro amid speculation that the Federal Reserve was approaching the end of its interest rate cutting cycle.

Do not panic over foreign wealth
Gideon Rachman (FT) Apr 28, 2008
The trouble is that legitimate caution about sovereign wealth funds could easily spill over into illegitimate hysteria. Foreign investment is still a subject that is exploited by demagogues, from the US to France to India.

Free school breakfasts in Cambodia threatened by rising rice prices
IHT Apr 28, 2008
Short of cash and facing huge increases in the price of rice, the United Nations agency that feeds the world's poorest people can no longer supply 450,000 Cambodian children with free breakfasts.

IMF Works With Vulnerable States on Food Price Policies
IMF Survey Apr 28, 2008
The IMF is working with vulnerable member countries to assess and respond to the fiscal, balance-of-payments, and income effects of higher food and commodity prices. Several countries have also asked for extra financial support to cover higher food import costs.

The lifecycle of regions
David B. Audretsch, Oliver Falck, Maryann P. Feldman & Stephan Heblich (VoxEU) Apr 29, 2008
Economic geography models suggest various relationships between innovation and spatial concentration, from benefits of diversity in cities to agglomeration gains in specialised industrial parks. This column summarises empirical research that uses these theories to explain various stages of “regional lifecycles.” An important result is that supra-national EU policymakers are poorly positioned to address regions’ differing needs.

IMF Reform Secures Backing By Wide Margin
IMF Survey Apr 29, 2008
The IMF's Board of Governors has adopted by a wide margin far-reaching reforms of the institution's governance, supporting measures to increase the voting shares of a majority of the 185 member countries.

Food crisis is a chance to reform global agriculture
Martin Wolf (FT) Apr 29, 2008
Nobody knows how long these shocks will last, but they demand rapid policy changes across the globe. We must choose between fragmenting markets further and integrating them, between helping the poor and letting even more starve.

Four mega-dangers international financial markets face
Dennis J Snower (VoxEU) Apr 30, 2008
Financial regulation never works the way it should. Here one of the world’s most experienced analysts of the global financial system presents some remarkably clear thinking on why we should not just do more of the same. An alternative model for policy action is proposed.

How Europe can shape the global system
Zaki Laïdi (FT) Apr 30, 2008
We need to focus on the issues where the bloc can make a difference, rather than thinking in terms of a superstate.

Agriculture Negotiators Ask for More Time, Extending Push for Modalities Deal
BRIDGES Weekly Trade News Digest - Vol. 12, Number 15 Apr 30, 2008
The release of a key negotiating text in the Doha Round farm trade talks has been postponed until mid-May, as delegates have asked for more time to try to resolve differences on certain specific issues in the troubled negotiations.

Global Push to Tackle Food Crisis
BRIDGES Weekly Trade News Digest - Vol. 12, Number 15 Apr 30, 2008
In an attempt to address the global crisis over high food prices, UN Secretary-General Ban Ki-moon has set up a special task force drawing on 27 international agencies, including UN bodies as well as the WTO and World Bank.

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