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Articles/Commentary

Another sad result on aid effectiveness
Dierk Herzer & Peter Nunnenkamp (VoxEU) Apr 1, 2012
The longstanding debate on aid effectiveness has failed to produce conclusive evidence that aid promotes economic growth. This sad result of 40 years of research still leaves some hope. This column argues that foreign aid could help improve economic conditions of the poorest population segments and narrow income gaps. However, the data seems to indicate aid has actually widened the gap between the rich and the poor.

Euro Was Flawed at Birth and Should Break Apart No
Charles Dumas (Bloomberg) Apr 1, 2012
Since the launch of the euro in January 1999, Germany and the Netherlands have experienced a growth slowdown and loss of wealth for their citizens that would not have happened had they never joined the euro.

The G20 should say no to the eurozone
Wolfgang Münchau (FT) Apr 1, 2012
The ESM is big enough to cope with the immediate problems – but not with unexpected events, which is its whole purpose.

Kirchner Grabs the Central Bank
Mary Anastasia O'Grady (WSJ) Apr 1, 2012
Argentina's monetary policy is now subject to the fiscal demands of the government. Citizens can look forward to more inflation.

Euro-Doom Is Fantasy, Why the Currency Won't Collapse
Charles Wyplosz (Bloomberg) Apr 1, 2012
When the euro was being created, the economics profession split into three groups -- enthusiasts, opponents and realists -- that predicted wildly different costs and benefits for the project. By 2007, when the young currency was thriving, the enthusiasts declared a premature victory. Now it’s the turn of the opponents, and they are, of course, wrong.

Public capital flows replacing private flows in the Eurozone: What it means for policy
Silvia Merler & Jean Pisani-Ferry (VoxEU) Apr 2, 2012
Many analysts and observers have put forward that the euro crisis is a balance-of-payments crisis at least as much as a fiscal crisis. This column provides evidence of capital-flow reversals in Greece, Ireland, Portugal, Spain, and Italy. It argues that the fostering of a pan-European banking industry and the creation of a banking union with centralised supervision and access to resources to recapitalise weak financial institutions should feature high on the policy agenda.

Has austerity gone too far? A new Vox Debate
Giancarlo Corsetti (VoxEU) Apr 2, 2012
Is austerity self-defeating? Is it keeping Europeans underemployed for years and destroying the very growth needed to pay off the debt? Or is it steering nations clear of Greek-like tragedies? So starts a new debate on Vox on austerity, introduced in this column.

Is China’s growth bad news for western countries?
Julian di Giovanni, Andrei Levchenko & Jing Zhang (VoxEU) Apr 2, 2012
The late Nobel Laureate Paul Samuelson argued that if China’s productivity growth accelerates in areas where it does not currently have a comparative advantage – notably the service sector – developed countries may suffer. This column presents a multi-country, multi-sector model, and reaches the opposite conclusion: the world, including developed countries, is far better off when China’s growth favours its current comparative disadvantage sectors.

The Hazard of Second Best
Mohamed A. El-Erian (Project Syndicate) Apr 2, 2012
The international community appears increasingly intent on settling for second best on two key issues to be discussed this month at global meetings in Washington, DC: the lingering (if currently dormant) European debt crisis, and the selection of the World Bank’s next president. It is not too late to change course.

The Anti-Fragile Life of the Economy
Antoine Danchin (Project Syndicate) Apr 2, 2012
Nassim Taleb, famous for his prescient identification of rare “black swan” events that are correlated with economic catastrophes, recently proposed “anti-fragility” as a way to conceptualize the reproduction of markets and output in the face of such events. In fact, anti-fragile structures and processes are everywhere – suffusing life itself.

An FDA for Securities Could Help Avert Crises
Eric Posner and Glen Weyl (Bloomberg) Apr 2, 2012
In February, Mary Schapiro, chairman of the Securities and Exchange Commission, said the agency is looking for ways to rein in high-frequency traders. That is, the people who use computer algorithms to buy and sell derivatives at lightning speed to make instantaneous profits.

The time bomb no one can defuse
Gideon Rachman (FT) Apr 2, 2012
If Greece leaves the eurozone and is plunged into chaos, the rest of Europe will be sucked into the resulting mess.

A divorce settlement for the eurozone
Arnab Das and Nouriel Roubini (FT) Apr 2, 2012
This strategy would ensure the viability of countries leaving the eurozone and maintain the customs union for all.

No break-up: the euro needs parental love
Martin Sandbu (FT) Apr 2, 2012
The failure to stem the panic is a matter of the politics of Europe, not the economics of the currency.

Spectre of 1930s haunts Europe’s periphery
John Thornhill (FT) Apr 2, 2012
Slashing public spending will aggravate problems, with the threat of a 1930s-style depression.

Brazil should embrace a freer market
Komal Sri-Kumar (FT) Apr 2, 2012
A more diverse economy will alleviate need for 'currency wars'.

Golden Rules for the Eurozone
Harold James (Project Syndicate) Apr 3, 2012
The European Monetary Union, as many of its critics maintain, looks a lot like the pre-1913 gold standard, which imposed fixed exchange rates on extremely diverse economies. But is that resemblance as bad as it sounds, or as the euro’s critics insist?

The austerity question: ‘How’ is as important as ‘how much’
Alberto Alesina & Francesco Giavazzi (VoxEU) Apr 3, 2012
Europe’s embrace of austerity has sparked a debate among economists. This column argues that the debate has gone astray. Until the critical principle – ‘how’ is as important as ‘how much’ – is embraced, the austerity debate in Europe will continue to be completely out of line with the real economic trade-offs.

Are US Multinationals Abandoning America?
Laura Tyson (Project Syndicate) Apr 3, 2012
Former Treasury Secretary Larry Summers recently said that US policymakers should focus on productive activities that employ American workers, not on corporations that are legally registered in the US but locate production elsewhere. But the sharp distinction between US economic interests and those of US multinational companies is misleading.

Two cheers for China’s rebalancing
Martin Wolf (FT) Apr 3, 2012
Despite progress on current account and trade surpluses, the domestic adjustment required is bigger than before the crisis.

It’s time to take stock of historical analysis
Laszlo Birinyi (FT) Apr 3, 2012
Relatively little analysis or thought is undertaken as to the validity or source of many of the numbers on which we make investment decisions.

An Insufficient Firewall
NYT Apr 3, 2012
Once again, euro-zone leaders came up short in addressing the debt crisis. They need to turn from debt-deepening usterity to substantial public investment.

How Huge Banks Threaten the Economy
Richard W. Fisher and Harvey Rosenblum (WSJ) Apr 3, 2012
Since the early 1970s, the share of assets controlled by the five largest banking institutions in the U.S. has tripled to 52% from 17%. This has to change.

No Kindle for Kirchner
WSJ Apr 3, 2012
In the age of the iPad, Argentina bans importing books.

Can We Live With High-Speed Trading?
Patrick Jenkins (WSJ) Apr 3, 2012
The alternative is to place politics above innovation.

The End of the Saudi Oil Reserve Margin
Jim Krane (WSJ) Apr 3, 2012
Riyadh is less and less able to cushion supply shocks as it consumes more and more of its own oil.

A rising protectionist threat
WT Apr 3, 2012
India last week hosted a forum of the most powerful developing nations to discuss various trade and political issues. The BRICS summit - so named after its members Brazil, Russia, India, China and South Africa - closed with the usual self-congratulatory remarks about global cooperation, but Brazil's comments stood out as a significant step in the wrong direction.

A Centerless Euro Cannot Hold
Kenneth Rogoff (Project Syndicate) Apr 4, 2012
Europe may never be an optimum currency area by any standard. But, without further profound political and economic integration – which may end up excluding some current eurozone members – the euro may not make it even to the end of this decade.

Whose World Bank?
Joseph E. Stiglitz (Project Syndicate) Apr 4, 2012
In Jim Yong Kim, the US has put forward a good candidate to lead the World Bank. But the candidate’s nationality, and the nominating country – whether small and poor or large and rich – should play no role in determining who gets the job.

What Should the World Bank Do?
Jose Antonio Ocampo (Project Syndicate) Apr 4, 2012
Successful development has always been the result of a judicious mix of market, state, and society. The next World Bank president must understand that – and that it is not the role of any international institution to impose a particular model of development on any country.

The good things in life require stability
Paul Tucker (FT) Apr 4, 2012
Central banks must be attentive to the effects monetary policy can have on risk-taking but they mustn’t try to do too many things.

Taiwan sets sight on becoming yuan hub
Jens Kastner (AT) Apr 5, 2012
The thousands of Taiwanese companies doing business in mainland China are obliged to do their currency dealings by way of Hong Kong. That could change if a renewed drive to allow direct conversion of the island's currency to yuan makes progress and Taiwan is made a hub for yuan exchange.

Getting ready to export
Leonardo Iacovone & Beata Javorcik (VoxEU) Apr 5, 2012
How do firms adapt their products before starting to export? This column argues they upgrade their products’ quality. Using data from Mexico, it shows that producers tend to enjoy a price premium on the domestic market relative to other companies producing the same product. This premium appears exactly one year before the product is exported, suggesting producers are getting ready to export.

Are commodity derivatives good or bad? New evidence from high-frequency data
David Bicchetti & Nicolas Maystre (VoxEU) Apr 5, 2012
Trade in commodity derivatives – such as oil futures – has grown tremendously over the last few decades. Some believe that the "financialisation" of commodity markets has made them more efficient. Others worry that financialisation has resulted in greater price distortions and volatility. This column presents high-frequency trading data suggesting that the sceptics may have a point.

Obama’s Blunder at the Bank
Jagdish Bhagwati (Project Syndicate) Apr 5, 2012
The selection of a successor to Robert Zoellick as President of the World Bank was supposed to initiate a new era of open meritocratic competition, breaking the traditional hold that the US has had on the job. But Barack Obama has let the world down with the nomination of Jim Yong Kim.

The good things in life require stability
Paul Tucker (FT) Apr 4, 2012
Central banks must be attentive to the effects monetary policy can have on risk-taking but they mustn’t try to do too many things.

My pitch to build a brave new World Bank
José Antonio Ocampo (FT) Apr 4, 2012
The Bank should be an inclusive forum to discuss the issues raised by the rapid growth of big emerging economies.

Europe Needs the Bond Vigilantes
Martin Feldstein (WSJ) Apr 4, 2012
The EU's 'fiscal compact' is an empty gesture.

BRICS prepares for Mexico showdown
Ravi Kanth Devarakonda (AT) Apr 4, 2012
Industrialized countries in the shape of the Group of 20 are seeking to set a new trade agenda at their Mexico summit this month. Their BRICS counterparts (Brazil, Russia, China, India and South Africa) aim to ensure development-led trade liberalization is not discarded. - Ravi Kanth Devarakonda

Europe enters the new scramble for Africa
Emanuele Scimia (AT) Apr 4, 2012
The beat of war drums along the disputed inter-Sudanese border is failing to repel a European Union push to cover a huge swathe of Central and East Africa. Like the United States, Europe is back to the old role of geopolitics where economic leverage trumps all else, and challenging China's developing interests in the chaotic but oil-drenched region. - Emanuele Scimia (Apr 3, '12)

Financial stability in emerging Europe: The Vienna Initiative
Ralph De Haas, Yevgeniya Korniyenko, Elena Loukoianova & Alexander Pivovarsky (VoxEU) Apr 3, 2012
Depending on which way you look at it, international banking either provided stability in countries where domestic banks failed or provided instability in otherwise well-run financial sectors. This column looks at the experience of Europe’s emerging economies. It argues that the latest Vienna Initiative aimed at improved coordination and information-exchange between banks is essential for financial stability in the region.

The ECB’s proportionate response to the Eurozone crisis
Bernard Delbecque (VoxEU) Apr 4, 2012
The ECB’s longer-term refinancing operations have been widely analysed. Although comments are largely positive, some experts have argued that direct ECB intervention was the only way to save the Eurozone. This column reviews the criticisms against the operations and assesses whether the ECB should have intervened directly in the sovereign-debt markets instead of providing funding to banks.

BRICS Push to Redress Power Imbalances at New Delhi Summit
Bridges Weekly Trade News Digest Volume 16, Number 13 Apr 4, 2012
Heads of state from Brazil, Russia, India, China, and South Africa - collectively known as the BRICS countries - concluded their fourth annual summit meeting in New Delhi on 29 March, with officials signing an accord to promote intra-BRICS trade in local currencies and proposing the creation of a new development bank to mobilise resources in the five-country group.

Currency, Trade Relationship in the Spotlight at WTO Seminar
Bridges Weekly Trade News Digest Volume 16, Number 13 Apr 4, 2012
The relationship between exchange rates and trade took centre stage at the WTO last week, as members gathered for a highly-anticipated seminar on the subject. The 27-28 March gathering was convened in response to Brazil's requests last year for the examination of possible trade tools to counter the impact of currency fluctuations - a debate that, one Brazilian trade official commented at the time, was "not taking place anywhere."

Argentina Import Controls Come Under Fire at WTO
Bridges Weekly Trade News Digest Volume 16, Number 13 Apr 4, 2012
Buenos Aires' trade policies fell under harsh scrutiny at the WTO last week, when the US, EU, Japan, and 11 other members openly criticised the South American country for its strict import controls.

Rio+20 Preparations Gather Steam Ahead of June Meet
Bridges Weekly Trade News Digest Volume 16, Number 13 Apr 4, 2012
The Rio+20 preparatory process continues to move forward, with delegates holding back-to-back meetings in New York over the past two weeks to negotiate over the outcome document for June's UN Conference on Sustainable Development (UNCSD). However, observers noted afterwards that there has been little convergence of negotiating positions so far, despite the UN summit drawing ever nearer.

Global Warming Is Real and Has Consequences – Part I
William Nordhaus (YaleGlobal) Apr 4, 2012
Although the consequences of global warming are painfully vivid, some scholars still question whether it requires urgent action. In January, a group of scientists, including those from the United States, Australia, France and the Netherlands, summarized reasons for their skepticism and opposition to findings of the UN’s Intergovernmental Panel on Climate Change. They insist that evidence is lacking to show the world is warming. They maintain that delaying action on climate change for 50 years would impose no serious economic consequences and could even offer benefits to less developed nations as they catch up with developed economies. But there are faults in the skeptics’ review of climate modeling, temperature trends and basic cost-benefit analysis. The skeptics contend that uncertainties do not warrant alarm or huge investments to launch a transition away from fossil fuels. But taking steps to slow climate change won’t result in economic catastrophe. The claim that cap-and-trade legislation or carbon taxes would be ruinous to our society does not stand up to serious economic analysis.

Marx at 193
John Lanchester (LRB) Apr 5, 2012
‘Online check-in is a process which should genuinely increase the efficiency of the airport experience, thereby costing you less time. But what the airlines do is employ so few people to supervise the bag drop-off that there’s no time-saving at all for the customer. Because airlines have to employ more people to supervise the non-online-checked-in customers – otherwise the planes wouldn’t leave on time – the non-checked-in queues move far more quickly. They’re transferring their inefficiency to the customer, but what they’re also doing is transferring the labour to you and accumulating the surplus value themselves.’ More

New World Bank president: what's on the agenda?
Bretton Woods Update No. 80 Apr 5, 2012
An unprecedented competition for the presidency of the World Bank, with two highly experienced developing country candidates nominated in addition to the US candidate, has raised demands for reform of the Bank's approach to middle-income countries, human rights, environmental issues, and the private sector, among others

Building alternatives BRICS by BRICS
Bretton Woods Update No. 80 Apr 5, 2012
With the future of the World Bank up for grabs in the presidency race and the IMF facing a resource crunch, many developing countries are pursuing alternatives to the Washington-based lenders, with Brazil, Russia, India, China and South Africa even mooting a joint BRICS Bank. Read More.

IEG finds World Bank not well adapted to crisis lending
Bretton Woods Update No. 80 Apr 5, 2012
The final report of the World Bank's Independent Evaluation Group's (IEG, the Bank's arms-length evaluation unit) assessment of the Bank's response to the 2008/09 global economic crisis confirms that Bank measures followed pre-crisis patterns and often failed to reach those most affected, leaving the Bank vulnerable to future crises.

Decolonizing the Franc Zone
Sanou Mbaye (Project Syndicate) Apr 5, 2012
The former French colonies that make up Africa's franc zone owe it to themselves to overhaul their relationship with France. Unless they do, they will almost certainly never attain the level of economic success of their sub-Saharan neighbors.

http://www.project-syndicate.org/commentary/the-mismeasure-of-wealth
Partha Dasgupta & Anantha Duraiappah (Project Syndicate) Apr 5, 2012
The UN's High-Level Panel on Global Sustainability published a report in January that calls for a radical redesign of the global economy, declaring that “tinkering around the margins” will no longer suffice. But, given that a similar report in 1987 reached the same conclusion, is there any reason to believe that this report will have any significant impact?

Global Equities: Building a Research Mosaic for the Information Age
John Longhurst (PIMCO) Apr 5, 2012
As a result of increasing correlations across the globe, identifying the best global franchise opportunities at attractive valuations is becoming increasingly important. We believe that taking a broader global perspective and comparing a company’s valuation and growth outlook versus their global competitors is just as germane as looking at them relative to their country or region. Identifying Chinese and non-Chinese companies that will gain and lose in this process is a critical long-term challenge when constructing a global portfolio – and not an easy one. We believe in increasing global exposure, seeking attractive valuations without traditional constraints and focusing on active share (in other words, maintain less of a benchmark orientation).

Markets Wake Up to Central Banks' Complicated Tradeoffs
Mohamed El-Erian (PIMCO) Apr 5, 2012
This week's market action serves as a vivid reminder of how dependent valuations are on central bank policies, and especially the aggressive provision of liquidity by the Federal Reserve and the European Central Bank. The question for markets thus boils down to whether central banks will do more; and the issues these institutions face are extremely and increasingly complex.

The Big Easing
Daniel Gros (Project Syndicate) Apr 5, 2012
For some time, it was argued that the Fed had done more than the ECB to stimulate the economy, because, using 2007 as the benchmark, it had expanded its balance sheet proportionally more than the ECB had done. But the ECB has now caught up – and finds itself on much riskier ground than the Fed.

Winning against malaria
Michael Gerson (WP) Apr 5, 2012
Zambia’s success also helps the U.S.

Growth Is the Right Medicine for Greece
Antonis Samaras (WSJ) Apr 5, 2012
It took 30 years of frivolous public spending to bring the country to a debt-to-GDP ratio of 120%. Two years of severe austerity brought debt to 168%.

The Real Causes of Income Inequality
Phil Gramm and Steve McMillin (WSJ) Apr 5, 2012
Any analysis of taxes paid in high tax-and-spend countries shows that the U.S. has the most progressive income tax system in the world.

Global Warming Is Real and Has Consequences – Part II
Pavin Chachavalpongpun (YaleGlobal) Apr 6, 2012
Trying to dodge fallout of climate change, firms reorganize supply-chain networks in Thailand and beyond.

The impact of corporate governance in financial institutions
Hamid Mehran, Alan Morrison & Joel Shapiro (VoxEU) Apr 6, 2012
A recent op-ed by a former Goldman Sachs employee has led to an outcry over two important themes which came to the fore during the crisis, ie corporate culture and incentives. This column argues that neither regulation nor market forces has put either of these issues to rest. It adds that bank complexity and the too-big-to-fail policy both serve to undermine market discipline.

Fiscal devaluation as a cure for Eurozone ills – Could it work?
Ruud de Mooij & Michael Keen (VoxEU) Apr 6, 2012
Troubled Eurozone countries face the difficult challenge of regaining competitiveness without devaluing their currency. Could a fiscal devaluation, shifting taxes from employers to consumers, help? This column presents evidence suggesting that it could, but the devil is in the detail.

Fears over floating currency
Joseph Allchin (AT) Apr 6, 2012
Stability in Myanmar will now be reflected in a floating exchange rate for its currency as the government moves to abandon an overvalued fixed rate in line with the more widely used black market value. Badly managed, the float could lead foreign capital now rushing in to flee just as quickly.

The US as number two
Dean Baker (AT) Apr 6, 2012
The Chinese economy may already be 20% larger than that of the United States, its growth increasing the options available to other countries, such as in raising capital. Beijing's policies may yet help ease others from the wasteful straightjacket of US patent and copyright rules.

How China Made Its Great Leap Forward
Ronald Coase and Ning Wang (WSJ) Apr 6, 2012
Some observers praise its 'state-led capitalism.' But the truth is that leaders, starting with Deng Xiaoping, loosened Beijing's control.

China and America: Not the G2, But the Big Two
Chas W. Freeman (Globalist) Apr 6, 2012
We may not be headed toward a new bipolar world, but how the United States and China manage their relationship will go a long way in determining whether the 21st century is a tranquil or turbulent one.

America's Place in the New World
Charles A. Kupchan (NYT) Apr 7, 2012
The most potent challenge to America's dominance comes not from the continuing redistribution of global power, but from the new forms of governance and capitalism being forged by China and other rising nations.

Can Coffee Kick-Start an Economy?
Daniel Bergner (NYT) Apr 7, 2012
The chief executive of Good African Coffee in Kasese, Uganda, is trying an entrepreneurial experiment.

Democratize Wall Street, for Social Good
Robert J. Shiller (NYT) Apr 7, 2012
Financial innovations from small-business loans to limited liability for investors have long delivered much good to society. A concept in the new jobs law offers yet another example.

East Africa's energy bonanza: Eastern El Dorado?
Economist Apr 7, 2012
At long last, a region is about to realise its vast energy potential.

The risk in clearing-houses: All clear?
Economist Apr 7, 2012
They are meant to solve problems in derivatives markets, but they create them, too.

Turkey’s economy: Istanbuls and bears
Economist Apr 7, 2012
Turkey has one of the world’s zippiest economies, but it is too reliant on hot money.

Company formation: Shells and shelves
Economist Apr 7, 2012
Making money by making companies: another industry that is globalising, consolidating and shifting east.

The incorporation business: They sell sea shells
Economist Apr 7, 2012
The companies that form companies are a shadowy world and (see article) a thriving industry.

Service export sophistication and economic growth
Rahul Anand, Susanna Lundstrom Gable & Saurabh Mishra (VoxEU) Apr 8, 2012
Thanks to developments in technology, trade in services is becoming increasingly more viable, with many businesses now dividing their operations across the world. This column creates a new measure of what it calls ‘service export sophistication’ to illustrate this shift. It highlights the need to refocus policy debate with the understanding that service exports are vital for high economic growth.

Economists Have a Lot to Learn From the Weather
Mark Buchanan (Bloomberg) Apr 8, 2012
Almost five years after a financial crash nearly thrust the world into depression, a peculiar paradigm still dominates economic thought. Known as the neoclassical school, it aims to give Adam Smith’s notion of the invisible hand its mathematical form. It asserts that markets naturally seek an equilibrium that harnesses individual self interest to allocate investment capital in an optimal way. Even if that perfectly efficient ideal is never reached, the logic goes, markets work better insofar as they approach it.

Rousseff should leave US with a trade deal
Moises Naim (FT) Apr 8, 2012
A US official speaking anonymously because of her dealings with Brasilia told me that Brazil is the ‘France of Latin America’.

The Myth of America's Decline
Walter Russell Mead (WSJ) Apr 8, 2012
Washington now has added China, India, Brazil and Turkey to its speed dial, along with Europe and Japan. But it will remain the chairman of a larger board.

Should hedge funds be more open?
Andrew Patton, Tarun Ramadorai & Michael Streatfield (VoxEU) Apr 9, 2012
In the wake of the financial crisis, the Securities and Exchange Commission proposed a rule requiring US-based hedge funds to provide regular reports on their performance, trading positions, and counterparties. Before the policy is phased in later this year, this column argues that such a move will benefit not only regulators but investors as well.

My vision for the World Bank
Ngozi Okonjo-Iweala (FT) Apr 9, 2012
I lived through the Nigerian civil war in my formative years. I saw how violence could upset economic development.

China’s next generation should look to Zhu
Arvind Subramanian (FT) Apr 9, 2012
Domestic opposition to reform remains substantial and reformers need all the help they can get to overcome it.

Focus on M&A can carry risks for banks
Patrick Jenkins (FT) Apr 9, 2012
Advisory banking and corporate finance are low-risk businesses to gravitate towards. The snag is that the potential profits also look small.

The Fed's Swap Bailout of the Eurozone
Philipp Bagus (Mises Daily) Apr 9, 2012
On Tuesday, March 26, 2012, I was invited by Ron Paul and his staff to assist a meeting of the Domestic Monetary Policy and Technology Subcommittee of the House Committee on Financial Services. The title of the hearing was "Federal Reserve Aid to the Eurozone: Its Impact on the U.S. and the Dollar."

In Defense of Oil Speculators
Blake Clayton (FA) Apr 9, 2012
With high gasoline prices across the United States, the knives are out for speculators in the oil market. Speculation is an easy scapegoat, but it's the wrong one. If anything, speculators help energy prices respond to shifts in supply and demand, benefiting producers and consumers alike.

Bearish on Brazil
Ruchir Sharma (FA) Apr 10, 2012
Until recently, there seemed plenty of reasons to be bullish on Brazil. Having posted record growth for a decade and weathered the financial crisis well, the country looked poised to become a global economic leader. But the would-be giant stands on feet of clay. The economy depends too much on high commodity prices, and as demand falls, so may Brazil.

The EZ breakup contest: Take ignorance seriously
Richard Baldwin (VoxEU) Apr 10, 2012
The five finalists of the £250,000 EZ breakup contest were announced last week; only one has a graduate degree in economics. This column argues that three are amateurish efforts full of economic and factual errors. European economists should take such ignorance seriously. Failure to do so in the US allowed odious ideas to gain respectability.

Reinventing the World Bank, Again
Ana Palacio (Project Syndicate) Apr 10, 2012
With three nominees now in the running to become the World Bank’s next president, we should step back and assess the Bank’s trajectory. Unless the next president has a clear vision of the way ahead, and the gravitas to withstand the institution’s internal pressures, he or she will be swallowed up by its complex machinery and unwieldy processes.

U.S.-China Economic Relations: The Next 40 Years
Robert D. Hormats (Globalist) Apr 10, 2012
The United States and China have an opportunity to shape the future global economic system for the benefit of themselves and the world. But there are dynamics in play that are quite different from when the relationship restarted 40 years ago.

Commodity Price Booms Call for Saving, Investing in Growth
IMF Survey Apr 10, 2012
Saving up during good times for use in bad times protects small commodity-exporting countries from commodity-price swings. But if the higher prices look permanent, exporters can begin to spend on public investment and lower taxes, the IMF says in a World Economic Outlook chapter.

Household Debt Holds Back Recoveries but Restructuring Can Help
IMF Survey Apr 10, 2012
The more households accumulate debt—mortgages, personal loans, and credit card debt—during a boom, the deeper the subsequent slump in the economy and the weaker the recovery, according to new IMF research published in the April 2012 World Economic Outlook.

HFT Pushes Small Banks Away from Major Currencies
Charles Wallace (II) Apr 10, 2012
Thanks to the rise of high frequency trading in foreign exchange markets, many smaller banks have found themselves squeezed out of buying and selling major currencies like the euro and the British pound...

High-Speed Trading Is Progress, Not Piracy
Bernard S. Donefer (Bloomberg) Apr 10, 2012
They steal from the rich and keep it! That sums up the criticism of E-pirates, aka high-frequency traders, the current bad boys of the financial markets. Many retail and institutional investors believe that as much as $2 billion annually in high-frequency trading profits are coming out of their own pockets.

'Fortune 500' of 1812 Shows US Banks' Early Influence
Richard Sylla and Robert E. Wright (Bloomberg) Apr 10, 2012
Fortune magazine began publishing annual rankings of U.S. corporations by revenue in 1955. Ever since, scholars and forecasters have analyzed changes in the Fortune 500 to help inform their judgments about industry concentration and the relative importance of different sectors of the economy.

Emerging Market Rates: A Different Cycle
Francesc Balcells (PIMCO) Apr 10, 2012
Cyclical support for lower emerging market local interest rates is losing steam, but structural and global factors supporting lower rates will likely remain intact over the secular horizon. The business cycle in emerging economies has been conducive to easing policy rates. Global growth decelerated noticeably in the second half of 2011, and this included most EM economies. While we expect EM local rates will move higher again as the business cycle progresses, the cyclical highs will likely be lower than the previous highs, reinforcing the secular trend towards lower rates. We like EM local rates with a strong credit quality component, steep local curves and high real rates that may offer compensation for taking inflation risks. The local markets of Brazil, Mexico and South Africa all stand out.

Why the Bundesbank is wrong
Martin Wolf (FT) Apr 10, 2012
Eurozone has rescued itself from a heart attack, but must still manage a difficult convalescence, with a good chance of more attacks.

Syria’s regime is doomed
Paul Collier (FT) Apr 10, 2012
Assad has survived for so long because he avoided crossing a red line of international outrage. Homs was that red line.

Africa needs honesty over EU trade deals
Chukwuma Charles Soludo (FT) Apr 10, 2012
Europe’s approach is the equivalent of the Berlin Conference that divided the continent among the great powers.

Coal fight shows how India treats investors
James Crabtree (FT) Apr 10, 2012
The Children’s Investment Fund says its threats against Coal India are having an effect, but they are unlikely to win a wholesale change in policy

Finance and constitutions
Thorvaldur Gylfason (VoxEU) Apr 11, 2012
Most economists would agree that the global financial and economic crisis was at least partly caused by a failure in the regulation of the financial sector. While regulatory reform is now being debated throughout the world, critics argue that it is only a matter of time before any new regulations are removed by powerful interest groups. This column asks whether prompt corrective action belongs in constitutions.

Eurozone Chutzpah and the IMF
Simon Tilford (Project Syndicate) Apr 11, 2012
European officials take it for granted that the IMF should support the eurozone, as if the rest of the world had some kind of duty to do so. It does not, and it should not allow the eurozone to extort that support.

Reversing Europe’s Renationalization
George Soros (Project Syndicate) Apr 11, 2012
At the onset of the euro crisis, a eurozone breakup was inconceivable: assets and liabilities were so intermingled that a breakup would have led to an uncontrollable meltdown. But, as the crisis has progressed, the eurozone financial system has been progressively reoriented along national lines.

Contra Bernanke on the Gold Standard
Frank Shostak (Mises Daily) Apr 11, 2012
In his lecture at George Washington University on March 20, 2012, Federal Reserve chairman Ben Bernanke said that under a gold standard the authorities' ability to address economic conditions is significantly curtailed. The Fed chairman holds that the gold standard prevents the central bank from engaging in policies aimed at stabilizing the economy after sudden shocks. This in turn, holds the Fed chairman, could lead to severe economic upheavals.

Brazilian President Cites Currency Concerns in White House Visit
Bridges Weekly Trade News Digest Volume 16, Number 14 Apr 11, 2012
Monetary policies in rich countries are putting emerging economies at risk, Brazilian President Dilma Rousseff told US President Barack Obama on Monday. The comments at the high-profile White House meeting come amid growing tension between developed and emerging economies over the impact of exchange rate policies on trade, which has led Brazilian officials to recently renew warnings of a global "currency war."

India to Challenge Visa Fees at WTO: Official
Bridges Weekly Trade News Digest Volume 16, Number 14 Apr 11, 2012
India is expected to launch a WTO dispute against the US in the coming days over increased visa fees for skilled workers, according to top government officials. The announcement comes a month after Washington lodged its own complaint against New Delhi regarding India's ban on imports of US poultry and other farm products, hinting at rising tensions between the two trading partners (DS430).

France Wavers on EU Aviation Emissions Rule
Bridges Weekly Trade News Digest Volume 16, Number 14 Apr 11, 2012
The French government is urging the EU to revisit its decision to include aviation in its Emissions Trading System (EU ETS), as opposition continues to build over the controversial scheme. Meanwhile, prices of carbon permits continue to falter, raising questions over the future of the ETS as a whole.

Disputes Roundup: Public Health Cases Move Forward at WTO
Bridges Weekly Trade News Digest Volume 16, Number 14 Apr 11, 2012
The debate over how to balance public health concerns against protectionism fears again featured at the WTO last week, with the Appellate Body issuing its ruling in the Indonesia-US row over clove cigarettes. Meanwhile, another dispute has also been launched against Australia's controversial cigarette packaging law, with Honduras filing a request for consultations on Wednesday 4 April.

Evolution, Impact and Limitations of Unusual Central Bank Policy Activism
Mohamed A. El-Erian (PIMCO) Apr 11, 2012
I will speak in a central bank and to central bankers about the role of their institutions – particularly the Federal Reserve and the European Central Bank – in today’s highly complex, perplexing and historically unusual policymaking environment. I will go further and try to link actions to motivations. And, when it comes to implications, I will attempt to put forward questions and hypotheses that, I believe, are critical for the future of the U.S. and global economies but for which I, like others, have only partial answers.

China growth fragile
Robert M Cutler (AT) Apr 12, 2012
Demand in March from the United States and Europe helped China register a small first-quarter trade surplus, but lower-than-expected imports and a pessimistic outlook at China's smaller businesses suggests rocky overall growth.

Regulators should encourage more diversity in the financial system
Charles A.E. Goodhart & Wolf Wagner (VoxEU) Apr 12, 2012
"Don't put all your eggs in one basket" is standard financial advice. This column says that financial regulators are violating that principle. It argues that financial institutions have become too similar to each other, making financial crises more likely. It proposes a regulatory approach based on relative stock market correlations that would encourage greater diversity in the financial system.

The ECB’s Lethal Inhibition
Barry Eichengreen (Project Syndicate) Apr 12, 2012
Just fourth months after the ECB began pouring liquidity into Europe's banks, matters are again coming to a head as Italy and Spain spiral into recession. The hurdles to further monetary-policy action are high, but they are largely self-imposed, and are placing economic growth and structural reform at risk.

Europe’s future is not up to the Bundesbank
George Soros (FT) Apr 11, 2012
The only way to escape the debt trap is to recognise that current policies are counterproductive and change course.

The BoJ needs to show it is serious
Frederic Neumann (FT) Apr 11, 2012
What really matters is whether the central bank eventually steps up asset purchases and expands its balance sheet but there is little evidence of it.

A smart pick for the World Bank
Paul Farmer and John Gershman (WP) Apr 11, 2012
Jim Kim’s humility would serve the bank well.

US Battle to Revive Manufacturing – Part I
Bruce Stokes (YaleGlobal) Apr 11, 2012
Job growth urged by US presidential candidates may not support high standard of living.

The G-20 Is Failing
Edwin M. Truman (FP/PIIE) Apr 12, 2012
The leaders of the G-20 countries have played a crucial role in rescuing the world from the brink of economic and financial disaster. They agreed to an impressive agenda in Washington in November 2008, and at their April 2009 London summit committed themselves to an integrated strategy to rescue the world economy from the brink of depression, to reform international financial regulation, and to transform the governance of the world's most important global financial institutions.

Newtonian Profits
Neel Kashkari (PIMCO) Apr 12, 2012
Today many equity investors are asking whether corporate profit margins can stay strong. Stock prices today are anchored on strong profits, hence investors’ intense focus on the sustainability of those profits. If they fall, stock prices are likely to follow. No doubt individual companies and individual sectors will face margin pressure. But for the equity market as a whole, our central scenario is for corporate margins to remain strong in the near future. As always, we are buying individual companies we like based on our analysis of their own fundamentals in the context of the economic environment they are operating in, and we are keeping one eye focused on managing downside risks.

Budgetary Wishful Thinking
Jeffrey Frankel (Project Syndicate) Apr 12, 2012
Clearly, part of the blame for many countries' current debt problems lies with voters who don’t want to hear that fiscal discipline means cutting programs that matter to them, and with politicians who tell voters only what they want to hear. But one factor has attracted little notice: systematically over-optimistic official forecasts.

Debt Reckoning for Europe
Amar Bhidé (Project Syndicate) Apr 12, 2012
Saving the euro, say the sages of the global economy, requires radical steps. But, rather than binding treaties, fiscal union, or homogeneity of membership, what is needed are mechanisms that recognize and accommodate differences, rather than attempt to impose uniformity from above.

What Is Next for Spain?
Jacob Funk Kirkegaard (PIIE) Apr 12, 2012
When a minister of finance and economics states that his country “does not need a rescue at this time” and the central bank governor cautions that banks will need more capital “if the economy worsens more than expected,” private bondholders are likely to take notice. As someone who has repeatedly maintained that a prolonged crisis is a necessary spur to solving the euro’s challenges, this author is in a sense encouraged by the recent return of Spain to the financial markets’ crosshairs. But just what Spanish Economy Minister Luis De Guindos and Spanish Central Bank Governor Miguel Ángel Fernández Ordóñez thought markets would make of their recent statements is unclear.

The Dollar's Decline as a Reserve Currency and the Emerging Multicurrency System
Edwin M. Truman and Allie E. Bagnall (PIIE) Apr 12, 2012
Newspapers are full of stories and learned commentaries about the decline in the US dollar as the premier international reserve currency. These reports, to the extent that they are based on any facts, tell only a small part of the story of the evolution of international reserve holdings in recent years. The real news is that the world is moving rapidly toward a multicurrency international reserves system. The US dollar is less dominant, and there are many other currencies in the mix—including, increasingly, non-traditional minor reserve currencies.

Mexico steps out of Brazil’s shadow
John Paul Rathbone (FT) Apr 12, 2012
There is reason to be less bullish about China, and thus Brazil, and more bullish about the US, and thus Mexico.

Oil markets should heed Libor lessons
Gillian Tett (FT) Apr 12, 2012
The scandal over Libor’s ‘reported’ prices and how they could be distorted offer a lesson for what might be about to happen in oil markets.

'Dutch Disease Lite' in Australia's Economy
Robert Mead (PIMCO) Apr 13, 2012
Australia is probably more likely to feel the effects of an extended structural change in the economy as resources continue to be reallocated, rather than the effects of a full-fledged, but transitory, case of “Dutch disease.” China is Australia’s largest trading partner, and China’s historical focus on infrastructure building has amplified the divergence in Australia’s two-speed economy (in which the natural resources sectors significantly outpace the consumer and manufacturing sectors). Unemployment has remained low at 5.2%, which has thus far protected the non-mining sectors of the economy, yet the signs of stress are becoming more apparent. W believe Australia’s strong initial conditions should help ensure that Commonwealth Government Bonds remain one of the world’s “cleanest dirty shirts” for risk-averse investors.

US Battle to Revive Manufacturing – Part II
Clyde Prestowitz (YaleGlobal) Apr 13, 2012
The US must do what’s routine for competitive economies – develop an industrial policy

Europe’s Short Vacation
Nouriel Roubini (Project Syndicate) Apr 13, 2012
The honeymoon for the ECB's new president Mario Draghi has turned out to be brief. The trouble is that the eurozone has an austerity strategy, but no growth strategy – and, without that, all it really has is a recession strategy that makes austerity self-defeating, because, if output continues to contract, deficit and debt ratios will continue to rise to unsustainable levels.

Ex-UNCTAD staff join battle on North
Vijay Prashad (AT) Apr 13, 2012
Rich countries should not ride roughshod over UNCTAD, the United Nations trade body, in key forthcoming trade and economy summits, given its superior forecasting record compared with the World Bank and the International Monetary Fund, former officials demand.

Herat trade on the up and up
Mohammad Ali Jawed and Harun Hakimi (FT) Apr 13, 2012
Afghanistan's western Herat province, gateway to Iran, is enjoying a resurgence in trade that is boosting jobs and pay, thanks to cuts in red tape and local support. Corruption and security, though improved, remain burdens.

The Great Guano Boom — and Bust
Peter C. Earle (Mises Daily) Apr 13, 2012
As energy prices rise with the never-ending vitiation of the dollar, euro, and other major currencies, the perennial hue and cry for government intervention in energy markets is again being heard. Interests promoting these policies advocate both government manipulation of markets for oil, coal, natural gas, and other commodities, and also consolidated state control over unrefined resources, such as oil fields and mineral veins, like those in the Arctic Natural Wildlife Refuge.

Inter-bank interest rates: Cleaning up LIBOR
Economist Apr 14, 2012
A benchmark which matters to everyone needs fixing.

In Nigeria, a Preview of an Overcrowded Planet
Elisabeth Rosenthal (NYT) Apr 14, 2012
Much of the Earth's population growth is in sub-Saharan African nations like Nigeria, where trends that have lowered birthrates elsewhere have not yet caught on.

What the Return of Market Volatility Tells Us
Mohamed El-Erian (PIMCO) Apr 14, 2012
Four of last week's five daily trading sessions saw the Dow move by more than a hundred points. The wide fluctuations of the index reminded investors of the unsettling market volatility of last year. In the process, and after a wonderfully strong first quarter, questions multiplied as to whether stocks would again be subject to a mid-year correction.

A tale of two overhangs: The nexus of financial sector and sovereign credit risks
Viral Acharya, Itamar Drechsler & Philipp Schnabl (VoxEU) Apr 15, 2012
The deadliest aspect of the Eurozone crisis is the tripwire linking the riskiness of banks and governments. This column provides evidence of the link and explains how it arose. It argues that given the near-chaos-like interaction, the zero risk weights on sovereign bonds should be revisited.

How we will stop derivatives magnifying future crises
William Dudley (FT) Apr 15, 2012
Stability demands central counterparties be subject to tough rules and oversight to ensure they can withstand stresses.

What's Behind Brazil's Slow Growth
Mary Anastasia O'Grady (WSJ) Apr 15, 2012
Politicians in Bras?lia are depressing investment by placating manufacturers.

Why the Buba is right
Thomas Mayer (DB Research) Apr 16, 2012
The ECB’s non-standard monetary policy measures were taken to deal with problems in the financial sector and not to extend monetary policy easing beyond interest rate cuts, as was the case in the US and UK. Hence, these measures should logically only be continued as long as they promote efficient adjustment in the financial sector. The present regime of fixed rate, full allocation refinancing operations tends to ease the adjustment burden in the financial sector of countries with internal and external deficits and to shift the costs of rebalancing the balance of payments of EMU member countries to balance of payments surplus countries. Relative prices are adjusted by pushing prices in the surplus countries up without exerting downward pressure on prices in the deficit countries. With a new fiscal pact and permanent crisis management mechanism in place as of the middle of this year, it is now up to governments to engineer a more symmetrical adjustment. Should the new EMU architecture prove insufficient, governments should take the necessary additional steps and refrain from enlisting the ECB in making up for these deficiencies, in our view.

Credit: A Starring Role in the Downturn
Òscar Jordà (FRBSF) Apr 16, 2012
Credit is a perennial understudy in models of the economy. But it became the protagonist in the Great Recession, reviving a role it had not played since the Great Depression. In fact, the central part played by credit in the downturn and weak recovery of recent years is not unusual. A study of 14 advanced economies over the past 140 years shows that financial crises have frequently led to severe and prolonged recessions. Shining the spotlight on credit turns out to be crucial in understanding recent economic events and the outlook.

Germany Reformed Its Social Model. Europe Can, Too
Josef Joffe (Bloomberg) Apr 16, 2012
Forget Europe’s debt disaster for a moment and look instead at a few numbers that dramatize the underlying problem.

Europe is distracted by endless firewall talk
Robert Zoellick (FT) Apr 16, 2012
The survival of the eurozone now depends on Italy and Spain. They are the countries that are too big to fail – or to rescue.

Sordid footnote offers lesson for megabanks
Tom Braithwaite (FT) Apr 16, 2012
Years of globalisation are going into reverse as Gordon Brown’s beggar-thy-neighbour approach is replicated globally.

Don’t let Spain detract from Portugal
Valentijn van Nieuwenhuijzen (FT) Apr 16, 2012
The smaller Iberian nation poses the greater contagion risk.

In Europe, A Fierce Debate Over Growth or Austerity
Paul Taylor (Reuters/NYT) Apr 16, 2012
Fierce debate is growing in Europe over whether austerity or economic growth offers the best strategy to overcome the continent's sovereign debt crisis.

From the American Century to the Competition Century
Charles A. Kupchan (Globalist) Apr 16, 2012
Rising powers like China, Brazil, Turkey and India will bring an eventual end to the era of Western dominance. But what comes next is not likely to be the Chinese century, the Asian century or anyone else's century.

The Eurozone: A Moral-Hazard Morass
Philipp Bagus (Mises Daily) Apr 17, 2012
European politicians are still trying to save the project of the euro. They design ever-greater bailout packages. Along with the bailouts, an economic government may be forthcoming. Countries may give up parts of their sovereignty. The character of the European Monetary Union (EMU), and even the European Union (EU), may change forever.

Outlook Slowly Improving but Remains Fragile
IMF Survey Apr 17, 2012
Prospects for the global economy are slowly improving again, but risks remain elevated and growth is expected to be weak, especially in Europe, with unemployment in many advanced economies staying high, the IMF says in its latest forecast.

Urban America: US cities in the global economy
James Manyika, Jaana Remes, Richard Dobbs, Javier Orellana and Fabian Schaer (McKinsey) Apr 17, 2012
In a world of rising urbanization, the degree of economic vigor that the economy of the United States derives from its cities is unmatched by any other region of the globe. Large US cities, defined here as those with 150,000 or more inhabitants, generated almost 85 percent of the country’s GDP in 2010, compared with 78 percent for large cities in China and just under 65 percent for those in Western Europe during the same period. In the next 15 years, the 259 large US cities are expected to generate more than 10 percent of global GDP growth—a share bigger than that of all such cities in other developed countries combined.

China: A Wider Trading Band Not a Signal for Faster Appreciation or Depreciation
Helen Qiao, Ernest Ho & Yuande Zhu (MS GEF) Apr 17, 2012
We do not think that the announced wider RMB trading band versus the USD signals faster appreciation or depreciation of the RMB.

How Brazil Broke Loose
Mark Roe & João Paulo Vasconcellos (Project Syndicate) Apr 17, 2012
For development institutions like the World Bank, poverty reduction is a continuing goal, and many at the Bank now view improvements in business law as a way to achieve it. But, however compelling the logic behind that view may seem, Brazil’s rise does not confirm it.

Why the eurozone may yet survive
Martin Wolf (FT) Apr 17, 2012
Members’ commitment to the ideal of an integrated Europe is an important motivation often underestimated by outsiders.

Away with jerry cans! Oil bubble is bursting
Nick Butler (FT) Apr 17, 2012
The rise of shale gas and restoration of output from Libya and, potentially, Iran will bring a serious adjustment in the market.

Between the lines of China’s growth story
Paul J. Davies (FT) Apr 17, 2012
There is a need to develop high-margin businesses if China is to do what so many other emerging Asian nations have failed to do: avoid the middle-income trap.

The Argentine Model
WSJ Apr 17, 2012
Why not expel a thieving Buenos Aires from the G-20?

The Challenge of Islamic Finance
Andrew Sheng & Ajit Singh (Project Syndicate) Apr 17, 2012
From humble beginnings in the 1990’s, Islamic finance has become a trillion-dollar industry. And, despite skepticism regarding accommodation between Islamic and global finance, leading banks are buying Islamic bonds and forming subsidiaries specifically to conduct Islamic finance.

Concerns over Protectionism, Currency Dominate Trade Agenda at Americas Summit
Bridges Weekly Trade News Digest Volume 16, Number 15 Apr 17, 2012
The impact of rich country monetary policy on Latin American economies and the rise of import restrictions in the latter both took centre stage last weekend as leaders from thirty Western Hemisphere countries gathered in Cartagena, Colombia. The Summit of the Americas also saw Washington and Bogotá establish the implementation date for their long-awaited trade pact, as US President Barack Obama works to promote his trade record ahead of the November presidential elections.

India Challenges US on Steel Duties
Bridges Weekly Trade News Digest Volume 16, Number 15 Apr 17, 2012
Trade tensions between Washington and New Delhi ratcheted up another notch on 12 April, with India launching a WTO challenge against US countervailing, or anti-subsidy, duties on imports of certain Indian steel products (DS436). This complaint is the latest in a series of commercial disagreements between the two trading partners.

Jim Yong Kim Named New World Bank Chief
Bridges Weekly Trade News Digest Volume 16, Number 15 Apr 17, 2012
The World Bank announced on Monday that Jim Yong Kim will be the organisation's next president, following a heated race that saw developing countries challenging the US for the Washington-based international financial institution's top post.

Market discipline, disclosure, and transparency
Xavier Freixas & Christian Laux (VoxEU) Apr 17, 2012
Faith in market discipline has been shattered by the financial crisis. This column argues that the failure of market discipline has different roots. It points to a lack of transparency and efficiency, particularly when it is needed most. In order to rectify this, however, it is not enough to merely increase the provision and disclosure of information. Instead, transparency depends on how that information is interpreted and used.

Too early to sound the alarm
Manfred J M Neumann (VoxEU) Apr 17, 2012
Debt finance of public consumption has clearly gone too far in several countries, reaching the borderline of sustainability. Have austerity measures now gone too far as well? This column argues it seems too early to sound the alarm. First, the global economy is likely to grow by 3.3 % this year, and second, reversing the fiscal stance or exiting the euro are worse options than austerity.

Down with Debt Weight
Robert Skidelsky (Project Syndicate) Apr 18, 2012
Nearly four years after the start of the global financial crisis, many are wondering why economic recovery is taking so long. But, with fiscal, monetary, and exchange-rate policies blocked, the only way out of prolonged recession is through comprehensive forgiveness of public and private debts.

To Thrive, Euro Countries Must Cut Welfare State
Fredrik Erixon (Bloomberg) Apr 18, 2012
Most criticism of government profligacy in Europe lately has focused on the obvious sinners, such as Greece, which already had massive public debts and deficits when the global financial crisis struck almost four years ago.

The siren call of populism seduces again
Moisés Naim (FT) Apr 18, 2012
The most surprising and permanent trait of Argentina’s politics is what I call a systemic learning disability.

Eurozone is starting to look Japanese
Richard Milne (FT) Apr 18, 2012
The fear of emulating the Japanese experience has been a worry ever since the financial crisis broke in 2007.

The Tragedy of Argentina
Pierpaolo Barbieri (WSJ) Apr 18, 2012
Commentators on Greece are drawing all the wrong lessons from my homeland's tragic default.

Restructuring Eurozone banks to address Eurosystem imbalances
Ossi Leppänen (VoxEU) Apr 18, 2012
Since the start of the crisis the Eurosystem balance sheet has grown from €1200 billion in June 2007 to around €2900 billion in March 2012. But this is spread unevenly among different central banks within the Eurozone, raising the thorny issue of intra-area (TARGET) balances. This column argues that these balances signal a need for change and restructuring in the Eurozone banking sector.

How to Lower the Price of Oil
Bernard Haykel, Giacomo Luciani & Eckart Woertz (FP) Apr 18, 2012
The road to cheaper gas at the pump runs through Riyadh.

Sovereign debt and bank risk: New evidence
Chiara Angeloni & Guntram Wolff (VoxEU) Apr 19, 2012
Europe’s sovereign debt crisis has reignited the debate over the link between sovereign and banking risk. This column presents data from the July stress test and December Capital Exercise of European Banking Authority. It finds that holdings of sovereign debt is not the main driver of bank stock market performance but that investors do take into account the riskiness of sovereign debt in the bank’s host country.

Closer View of Financial Links Can Help Avert Crises
IMF Survey Apr 19, 2012
The IMF is revamping its financial monitoring role to keep pace with changes in the international financial landscape since the onset of the global financial crisis. The institution is readying a plan for its financial surveillance that focuses on links between institutions, markets, and national economies.

Don't Blame China's Currency for U.S. Trade Deficit
Yukon Huang (Bloomberg) Apr 19, 2012
The International Monetary Fund’s reduced medium-term forecast for China’s current-account surplus of about 4 percent of gross domestic product is belated recognition of recent developments. The adjustment may still turn out to be too high, but good luck telling that to U.S. politicians.

Draghi’s remedy must not become a panacea
Pierre Lagrange (FT) Apr 19, 2012
Decisive action by the ECB has sent a message to the markets that there is a willingness to do whatever is necessary

Kim Appointment May Spur Changes at the World Bank
Eswar Prasad (NYT) Apr 19, 2012
As Jim Yong Kim takes over, his credentials put him in a good position to initiate a much-needed reorientation of the World Bank's role in global development.

Euro-zone reforms backfire
David M. Smick (WP) Apr 19, 2012
Austerity measures complicate recovery efforts.

The World in 2062: Who Will Lead Us There?
Beat J. Guldimann (Globalist) Apr 19, 2012
Compared with 50 years ago, the world is faced with a whole new level of international volatility, spurred by a convergence of cataclysmic events. What, then, are the prospects for the next 50 years — and where are the leaders who have a vision of where to take the world over the coming decades?

The Eurozone's real malady
Uri Dadush & Zaahira Wyne (VoxEU) Apr 20, 2012
The current gyrations of sentiment over government-bond spreads in the Eurozone are generating much commentary. Yet this column argues they are diverting attention from the real issue – the Eurozone periphery needs a big realignment towards the tradable sector to reignite growth sustainably. It adds that EU policies have made little progress, casting doubt on whether the adjustment can succeed.

The austerity debate: Make haste slowly
Carlo Cottarelli (VoxEU) Apr 20, 2012
As with austerity itself, the austerity debate shows no sign of disappearing any time soon. This column argues that the last thing that the world economy needs at this uncertain moment is a knee-jerk reaction from fiscal policy. While the column agrees that governments need to make cuts, it stresses they should not lose sight of the bigger picture.

Beijing takes steps to free-float currency
Richard Colapinto (AT) Apr 20, 2012
China's decision to widen the trading limit of its currency amid a slowing economy is evidence it is not worried about a hard landing or rapid yuan appreciation, yet external politics, including the US presidential election and this week's IMF/World Bank meeting, are no doubt central factors in the timing of the announcement.

China set for stormy seas
Michael Pettis (AT) Apr 20, 2012
The sharp decline in China's current account surplus may considerably worsen, or be significantly reversed, depending on the forecaster. Either way, it is going to be a very strained and difficult process for both China, as it attempts to "rebalance" its economy, and the world.

Greetings From the New Africa
Richard Dowden (WSJ) Apr 20, 2012
For hundreds of years, outsiders have been divided sharply between Afro-pessimists who believe that Africa is permanently programmed to fail and Afro-optimists who see it as a cornucopia that could produce unimaginable wealth. In the 17th and 18th centuries, the slave trade made Europe rich, and Timbuktu was believed to be paved with gold. But then Africa became the "Dark Continent." In the 1960s, it was the rising giant while Asia was seen as a basket case. By 2000, the Economist was calling Africa the "Hopeless Continent."

Global: A Different Place
Spyros Andrepoulos, Joachim Fels & Manoj Pradhan (MS GEF) Apr 20, 2012
We lay out our big-picture view of the global economic and policy environment.

China: No longer the global imbalance villain
Marco Annunziata (VoxEU) Apr 21, 2012
According to its latest projections, the IMF no longer sees China as the main source of imbalances in the global economy. This column argues that fears of a stalling Chinese economy are exaggerated, and that sustained and more balanced Chinese growth will actually be a rare nugget of good news for the global economy.

Speculation in oil markets? What have we learned?
Lutz Kilian (VoxEU) Apr 21, 2012
Was the surge in the oil prices between 2003 and 2008 caused by financial investors taking speculative positions in oil futures markets? Many pundits and policymakers seem to think so, but this column says this view goes against the extensive body of evidence.

Is high public debt harmful for economic growth? New evidence
Ugo Panizza & Andrea F Presbitero (VoxEU) Apr 22, 2012
Countries with high public debt tend to grow slowly – a correlation often used to justify austerity. This column presents new evidence challenging this view. The authors point out that correlation does not imply causality – it may be that slow growth causes high debt. They argue that policymakers should be wary – the case for cutting debt to boost growth still needs to be made.

A World Adrift
Jeffrey D. Sachs (Project Syndicate) Apr 22, 2012
The annual spring meetings of the IMF and the World Bank have provided a window onto two fundamental trends driving global politics and the world economy: the shift to a multipolar world, and the physical limits to growth. Unfortunately, the level of global cooperation needed to meet the resulting challenges is nowhere to be seen.

Social Model Is Europe’s Solution, Not Its Problem
Paul Fourier (Bloomberg) Apr 22, 2012
In the wake of the financial crisis, Europe’s leaders are calling the continent’s social model into question -- it is “done,” according to European Central Bank President Mario Draghi. That’s a travesty.

IMF funds welcomed but aim is unclear
Robin Harding (FT) Apr 22, 2012
Lagarde secures $430bn for IMF and “great advantage” is assured but clarity is lacking on their basic undertaking

The Argentine Way of Business
Mary Anastasia O'Grady (WSJ) Apr 22, 2012
Nationalizations aren't new, but President Kirchner's grab of YPF from Spain's Repsol demonstrates the special nature of kirchnerismo.

The pain in Spain
Robert J. Samuelson (WP) Apr 22, 2012
What happens to world’s economy if Spain fails?

Is There No Escape from the Euro?
Philipp Bagus (Mises Daily) Apr 22, 2012
As I discussed recently, the costs and risks of maintaining the eurozone system are already immense and rising. So is an exit possible? Intuitively, the exit from the euro should be as easy as the entrance. Joining and leaving the club should be equally simple. Leaving is just undoing what was done before. Indeed, many popular articles discuss the prospects of an exit of countries such as Greece or Germany.[1] However, other voices have rightly argued that there are important exit problems. Some authors even argue that these problems would make an exit from the euro virtually impossible. Thus, Eichengreen (2010) states, "The decision to join the euro area is effectively irreversible." Similarly, Porter (2010) argues that the large costs of an exit would make it highly unlikely. In the following we address the alleged exit problems.

Working together for a better planet: The best is the enemy of the good
Valentina Bosetti, Carlo Carraro, Enrica De Cian, Emanuele Massetti & Massimo Tavoni (VoxEU) Apr 23, 2012
International agreements on ways to tackle climate change are in a depressing deadlock. This column argues that part of the problem is aiming too high. It suggests that slow and gradual progress towards controlling climate change is the only way forward. But this is at least better than waiting for an ideal solution that may never come.

Global economy: A fragile and fickle recovery
Karim Foda & Eswar Prasad (VoxEU) Apr 23, 2012
The world economy is showing scattered signs of improvement but remains fragile according to official forecasts. This column summarises the latest update of the Brookings Institution-FT Tracking Indices for the Global Economic Recovery. It confirms some positive signs but also much to worry about as the world economy continues to meander with no clear sense of direction.

France and Frankfurt
Harold James (Project Syndicate) Apr 23, 2012
Over the past two years, financial markets have turned the spotlight on a succession of countries, turning each into the epicenter of a seemingly perpetual European financial earthquake. But politicians always recognized that the heart of the European project was the relationship between France and Germany. Is that relationship now in jeopardy?

Reinventing the Sino-American Relationship
Michael Spence (Project Syndicate) Apr 23, 2012
Many fear that China and US are in the grip of major structural changes that will lead to direct competition between the two countries – a competition that only one side can win. That fear is understandable, but the premise is mistaken: both sides can and should gain from forging a new relationship that reflects evolving structural realities.

Brazil – Time to move towards a new growth strategy
Markus Jaeger (DB Research) Apr 23, 2012
Brazil’s economy has been benefiting from a positive balance-of-payments shock, namely rising commodity prices and strong capital inflows. This has allowed it to pursue a policy of domestic-consumption-oriented economic growth. Unless the world economy is being in the midst of a protracted commodity super-cycle, Brazil will not be able to rely on improving terms-of-trade forever. Sooner rather than later, Brazil will need to shift to a more investment-oriented growth strategy – not least because it will need to deal with the adverse consequences of gradually, but inevitably deteriorating demographic trends.

A World of Convergence
Kemal Dervis (Project Syndicate) Apr 23, 2012
For almost two centuries, starting around 1800, the history of the global economy was broadly one of divergence in average incomes: in relative terms, richer countries got even richer. But, from 1990 to 2010, average per capita income in the emerging and developing countries grew almost three times as fast as average income in Europe, North America, and Japan.

A euro parable: the couple with a joint account
Kenneth Rogoff (FT) Apr 23, 2012
The real lesson of the euro’s grand experiment is that the optimal single currency area is probably still a country.

The coming US boom and how shale gas will fuel it
Philip K Verleger Jr (FT) Apr 23, 2012
America is 'on the cusp of significant economic gains stimulated by low energy costs.'

As Goes France
Stephens (WSJ) Apr 23, 2012
Even exceptional nations cannot ignore the laws of economic gravity.

Divergence of fortunes in recoveries
M Ayhan Kose, Prakash Loungani & Marco E Terrones (VoxEU) Apr 24, 2012
How different is the current recovery from past ones? How do prospects differ between advanced and emerging economies? This column argues that the ongoing recovery in advanced economies has so far paralleled the weak and protracted recovery following the 1991 global recession to a surprising degree, partly because of challenges in Europe. In contrast, the recovery in emerging market economies has been unusually strong.

How to Compete in Europe
Philippe Maystadt (Project Syndicate) Apr 24, 2012
Europe needs productivity growth and innovation to ensure sustainable and inclusive economic growth. The main source of both is bound to be the services sector.

Markets of Magical Thinking
Esther Dyson (Project Syndicate) Apr 24, 2012
Americans are great believers in the value of entrepreneurs and small business, and a new US law will make it easier for small companies to raise money and bypass the regulatory “friction” that firms encounter when they go public. The rest of the world should resist the temptation to follow America's lead: sometimes friction has a purpose.

Reforming Global Finance, Saving Global Democracy
Luis Ubiñas (FT) Apr 24, 2012
The global financial crisis — and the devasting effect it has had on poor and low-income families — has illustrated the importance of fundamentally rethinking how financial markets are regulated. Reforming global finance is the key to economic and social stability worldwide.

Banks are on a eurozone knife-edge
Martin Wolf (FT) Apr 24, 2012
The immediate priority is to give the countries in difficulty the time to adjust their economies, and so achieve stability.

Europe's Phony Growth Debate
WSJ Apr 24, 2012
The austerity vs. spending fight ignores essential reforms.

The Financial Crisis on Trial
Hannes H. Gissurarson (WSJ) Apr 24, 2012
Iceland's former prime minister is found guilty of not holding enough meetings.

Using U.S. Dollars, Zimbabwe Finds a Problem: No Change
Lydia Polgreen (NYT) Apr 24, 2012
Faced with high shipping costs, Zimbabwe hardly has any coins, making it a headache for millions of people to try to get every transaction to add up to a whole dollar.

The Eurozone needs less Europe, not more
Avinash Persaud (VoxEU) Apr 25, 2012
Does Europe need a fiscal union to support its monetary union? This column argues that the cause of Europe’s problems is not public sector ill discipline but rather private sector ill discipline. In such a situation, it asks whether we should be trying to save a drowning man by putting him in a straightjacket.

A Crisis in Full Flight
Hans-Werner Sinn (Project Syndicate) Apr 25, 2012
For a while, it looked as if the ECB’s €1 trillion credit program to pump liquidity into Europe’s banking system had calmed global financial markets. But now, with interest rates on Spanish and Italian bonds rising again, it has become clear that the ECB's policy has merely made a bad problem worse.

To the Victors Go the Foils
Richard N. Haass (Project Syndicate) Apr 25, 2012
Three trends – loss of economic and physical autonomy, technological diffusion, and the growing inability to meet popular demands – are creating enormous political challenges in virtually every country. The many leaders who will assume power this year will have to face up to them – if they can.

EU, Argentina Trade Relations in the Spotlight amid Repsol Fallout
Bridges Weekly Trade News Digest Volume 16, Number 16 Apr 25, 2012
Tensions continue to escalate between Spain and Argentina in the wake of Buenos Aires' announcement last week that it would be nationalising the Spanish-owned Repsol YPF oil company. Madrid announced on Friday that it would be taking measures aimed at curtailing biodiesel imports from its South American trading partner, as EU officials also voiced their own frustration over the impact of the Argentine decision on Brussels-Buenos Aires trade relations.

Protectionism Concerns Resurface as G-20 Trade Ministers Meet in Mexico
Bridges Weekly Trade News Digest Volume 16, Number 16 Apr 25, 2012
Protectionism, job creation, and opening up trade topped the agenda as trade ministers from the Group of 20 leading economies met in Puerto Vallarta, Mexico last week, amid concerns over slowing global trade growth and rising import restrictions in some countries.

Differences Plague WIPO Negotiations on Traditional Knowledge
Bridges Weekly Trade News Digest Volume 16, Number 16 Apr 25, 2012
Negotiations last week at the World Intellectual Property Organization (WIPO) over a legal instrument intended to protect traditional knowledge (TK) saw mixed progress. Though a draft text will be forwarded to WIPO's General Assembly that includes some areas of convergence, various disagreements on the definition of TK, its beneficiaries, and the scope of a potential instrument marred the week-long discussions.

South-east Asia’s llama breaks into a trot
David Pilling (FT) Apr 25, 2012
For many, the Philippines remains a basket case. But that view lags behind the reality of an economy that is debt-free and growing.

Finance can fund a revolution in giving
Alexander Friedman and Patty Stonesifer (FT) Apr 25, 2012
Open the markets to the social sector in a manner that is good for investors and great for the world.

Dollar will win from shift in petro-balance
Mansoor Mohi-uddin (FT) Apr 25, 2012
Over the next decade America could become the largest oil producer in the world again. This tantalising prospect will clearly benefit the dollar

The Swedish model
Robert J. Samuelson (WP) Apr 25, 2012
The country has survived Europe’s debt crisis.

China Digs It
Damien Ma (FA) Apr 25, 2012
In the last few decades, China has become the world's top producer of rare earths, a group of elements key to manufacturing high-tech products. Now Beijing has started to institute price controls and export quotas to drive up prices, but that plan will likely backfire.

The Global Power Shift from West to East
Christopher Layne (The National Interest) Apr 25, 2012
When great powers begin to experience erosion in their global standing, their leaders inevitably strike a pose of denial. At the dawn of the twentieth century, as British leaders dimly discerned such an erosion in their country’s global dominance, the great diplomat Lord Salisbury issued a gloomy rumination that captured at once both the inevitability of decline and the denial of it. “Whatever happens will be for the worse,” he declared. “Therefore it is our interest that as little should happen as possible.” Of course, one element of decline was the country’s diminishing ability to influence how much or how little actually happened.

The Strategic Vacuum
Mohamed A. El-Erian (FP) Apr 25, 2012
We'll never get out of this financial mess unless we think bigger. Much bigger.

How Not to Write About Africa
Laura Seay (FP) Apr 25, 2012
The media shamefully neglects Africa -- until it decides to swarm a story with terrible coverage.

The crisis tales roll on
Chan Akya (AT) Apr 26, 2012
Exile on Wall Street by Mike Mayo Mike Mayo may be the most suitable person to stare down the CEOs of the world's top banks. As he points out in one of four books by various others reviewed here, the global financial crisis "didn't occur because of something that banks did. No, it was the natural consequence of the way banks are, even today."

Eurozone choice: Banking union or financial repression?
Nicolas Véron (VoxEU) Apr 26, 2012
In a bid to shore up the sorry state of Europe’s economies, there is now debate over the need for a European banking union to go with plans for a Eurozone fiscal union. This column argues that such proposals are necessary, but the necessary reform is still a long way off.

Argentina’s Energy Dilemma
Alieto Guadagni (Project Syndicate) Apr 26, 2012
The expropriation of nearly all of Spanish company Repsol’s stake in Argentina’s energy producer YPF, announced in early April by President Cristina Fernández de Kirchner, has raised legal alarms worldwide. But the move will not resolve the country’s energy problems in the absence of enormous inflows of investment to the sector.

America's Renminbi Fixation
Stephen S. Roach (Project Syndicate) Apr 26, 2012
For seven years, the US has allowed its fixation on the renminbi’s exchange rate to deflect attention from far more important issues in its economic relationship with China. The upcoming Strategic and Economic Dialogue between the US and China is an excellent opportunity to examine – and rethink – America’s priorities.

Ideas over Interests
Dani Rodrik (Project Syndicate) Apr 26, 2012
The most widely held theory of politics is also the simplest: the powerful get what they want. Yet this explanation is far from complete, and often misleading, because self-interest is neither fixed nor predetermined.

The great middle class power grab
Philip Stephens (FT) Apr 26, 2012
Everything points to a redistribution of economic power – for the first time more people will be middle class than poor.

Forget euro woes – brace for taxmageddon
Sebastian Mallaby (FT) Apr 26, 2012
A recent investment bank conference call ended advising clients to ‘buy volatility’. Translation: be very scared.

BoJ’s tests to hit other central banks
Henny Sender (FT) Apr 26, 2012
Central bank governor Masaaki Shirakawa is under rising pressure to keep the yen down and to respond to the will of politicians and business.

Death of a Fairy Tale
Paul Krugman (NYT) Apr 26, 2012
The good news first: people are finally admitting that austerity measures are not working. Now the bad news: there seems to be little prospect of a near-term course change.

Protectionism isn’t countercyclical (anymore)
Andrew K Rose (VoxEU) Apr 27, 2012
Conventional wisdom says that when the economy starts to nosedive, the trade barriers start to rise. But this column argues that maybe protectionism isn’t countercyclical after all.

Bringing It All Back Home
Howard Davies (Project Syndicate) Apr 27, 2012
Today’s statesmen like to say that they have avoided the protectionist error that fueled the Great Depression of the 1930's. But is that true, given indications of accelerating deglobalization in trade and finance?

The World Bank’s Wrong Choice
Jagdish Bhagwati (Project Syndicate) Apr 27, 2012
The selection of the American nominee Jim Yong Kim as President of the World Bank, over Nigeria’s finance minister, Ngozi Okonjo-Iweala, who was overwhelmingly regarded as a superior candidate, is impossible to condone but easy to explain. Will Kim’s leadership turn back the clock on development economics?

How To Get Food on Every Table
Bjørn Lomborg (Slate) Apr 27, 2012
We have enough food to feed everyone. But we need to produce even more. Here’s why.

Austerity Is No Quick Answer for Europe
Christina D. Romer (NYT) Apr 28, 2012
The core of a sensible approach to Europe's is to pass needed budget measures now, but to phase in actual tax increases and spending cuts gradually as economies recover.

A tale of two divergences
Alberto Alesina & Daniel Nadler (VoxEU) Apr 28, 2012
The divergence in sovereign spreads across Eurozone members has been the object of much attention. This column looks at divergence across US states and finds that unexpected deficits are correlated with higher state bond yields across all states. This effect is larger for states with left-leaning political systems, suggesting that bond-market participants view political variables as relevant in assessing the risk characteristics of sub-sovereign bonds.

How did US and EU trade policy withstand the Great Recession?
Chad P Bown & Meredith Crowley (VoxEU) Apr 28, 2012
As the global economy entered a crisis not seen since the Great Depression, many feared a return of 1930s-style protectionism. This column asks why many countries avoided this fate, focusing on trade policy in the US and EU.

The euro must go
Peter Morici (AT) Apr 28, 2012
Austerity programs are costing Europe's governments their legitimacy. The Germans and broader European Union must dial back on deficit reduction but will never get out of their quagmire without abandoning the euro in favor of national currencies.

World history, BRIC by BRIC
Pepe Escobar (AT) Apr 28, 2012
From a distance, the 21st century planet looks like a swirling mess crossed by a new and visible wall as the rising BRICS, economic powers with staggering problems, including swamps of corruption and potentially unsustainable levels of poverty, counter old powers that are potentially in decline, but still wage staggering clout. Up close and personal, the blueprint is set for confrontation of the full-spectrum kind.

Venice and Singapore: A Study in Parallels
George Yeo (Globalist) Apr 28, 2012
What is the relevance of Venice's maritime republic to today's Singapore?

Growth not austerity is best remedy for Europe
Lawrence Summers (FT) Apr 29, 2012
Treating symptoms rather than causes is usually a good way to make a patient worse. So it is in Europe.

TARGET2: Germany has bigger things to worry about
Karl Whelan (VoxEU) Apr 29, 2012
In recent years, instability in many European countries has led to large transfers of money into Germany. This in turn has led the Bundesbank to build up large credits with other central banks in Europe – via the TARGET2 system. Does this represent a risk to Germany in the event of a breakup of the euro? This column argues that Germany will have far bigger things to worry about.

A Berlin Consensus?
Andrew Sheng (Project Syndicate) Apr 29, 2012
Almost everyone agrees that the old paradigm of neoclassical economics is broken, but there is no agreement on what can replace it. A recent conference in Berlin explored the possibilities.

German Unions Seeking Higher Pay Could Save the Euro
Simon Johnson (Bloomberg) Apr 29, 2012
At times of economic crisis, politicians like to blame investors, preferably foreign investors.

Europe’s growth challenge
Lawrence Summers (WP) Apr 29, 2012
A collective response to the debt crisis.

The Last Argentine Picture Show
Andres Velasco (Project Syndicate) Apr 30, 2012
The only thing worse than a terrible movie is a terrible movie that we have already seen. By nationalizing oil giant YPF, Argentina has treated us to a tale of economic nationalism of a kind that the world knows all too well.

France and the Netherlands Strike Back
Jean Pisani-Ferry (Project Syndicate) Apr 30, 2012
In 2005, France and the Netherlands both voted no to a constitutional treaty for the European Union, derailing integration efforts for three years. Now they are now poised to disrupt Europe once again.

Credit default swaps: Useful, misleading, dangerous?
Richard Porte (VoxEU) Apr 30, 2012
Once upon a time, credit default swaps were a form of insurance held by investors who also owned the underlying asset. But this column argues that the market has now become overwhelmed by ‘naked CDSs’ that allow speculators to make bets on the future of corporates and sovereigns – bets that can be wildly destabilising. This column calls for a ban on naked CDSs.

France and the Netherlands Strike Back
Jean Pisani-Ferry (Project Syndicate) Apr 30, 2012
In 2005, France and the Netherlands both voted no to a constitutional treaty for the European Union, derailing integration efforts for three years. Now they are now poised to disrupt Europe once again.

Now is not the time for boring central bankers
Philipp Hildebrand (FT) Apr 30, 2012
European banks must be encouraged or, if necessary, forced by their regulators to strengthen their balance sheets.

Hybrid debt: a new old way to lose money?
Satyajit Das (FT) Apr 30, 2012
The question is whether the investor is properly compensated for the additional risk of taking on such capital instruments, which include ‘cocos’

Germany’s Neighborhood Watch
Mohamed A. El-Erian (Project Syndicate) Apr 30, 2012
Ultimately, there can be no strong Germany without a stable eurozone; no stable eurozone without a strong Germany; and no global economic stability without both. Germans might not like their choices, but refusing the responsibility of leadership is one option that Germany does not have.