News & Commentary:

Articles/Commentary

The Once and Future Dollar
Barry Eichengreen (American Interest) May 1, 2012
The week between Christmas and the New Year is normally a quiet time for economic news. On December 25, 2011, however, headlines were ablaze with the news: China and Japan had reached an agreement to use their own currencies in trade and financial transactions. Their governments would establish a market for direct exchange of yuan and yen, avoiding the convoluted process in which a bank or firm in one country must first sell its national currency for dollars and then use them to buy the currency of the other. As part of the same agreement, Japan’s central bank agreed to hold more of its foreign currency reserves, most of which are in dollars, in yuan instead.

Austerity and the End of the European Model
Abraham Newman (FA) May 1, 2012
Faced with a sovereign debt crisis, Europe, once the champion of mixed economies and generous social safety nets, has begun cutting government spending and eliminating regulations. But this neoliberal shift will only increase the chance of another financial crisis and could spark widespread unrest across the continent. Read

The True Lessons of the Recession
Raghuram G. Rajan (FA) May 1, 2012
Most experts think the global recession was caused by a collapse in demand -- and so, in good Keynesian fashion, they want governments to ramp up spending to compensate. But the West's recent growth was dependent on borrowing. Going even further into debt now won't help; instead, countries need to address the underlying flaws in their economies. Read

Developing Symptoms
Thomas J. Bollyky (FA) May 1, 2012
The main health threat in developing states today is not plagues or parasites but illnesses such as cancer and diabetes, noncommunicable diseases long associated with the rich world. NCDs are striking poorer, younger populations, and this could debilitate states and the global economy. The best way for the West to help is by pushing for governance reform.

A Chance for Happiness for Europe's Unhappy Family
Yanis Varoufakis (Globalist) May 1, 2012
Tolstoy's Anna Karenina begins famously with the observation that "all happy families are alike, but every unhappy family is unhappy in its own way." These days, Europe is clearly an unhappy family. But its fate doesn't need to be as tragic as Anna's.

What We Owe Egypt
Daron Acemoglu & James A. Robinson (Project Syndicate) May 1, 2012
What has transformed Tunisia, Egypt, and Libya over the last two years has not been efforts by the outside world to improve these societies or their economies, but grassroots social movements intent on changing their countries’ political systems. The least that outsiders can do, especially in Egypt, is to stop channeling foreign aid to the former oppressors.

The Resistible Rise of Asia?
Brahma Chellaney (Project Syndicate) May 1, 2012
A favorite theme in international debate nowadays is whether Asia’s rise signifies the West’s decline. But the current focus on economic malaise in Europe and the United States is distracting attention from serious challenges that call into question Asia’s continued success.

After the bonfire of the verities
Martin Wolf (FT) May 1, 2012
The new world of post-financial-crisis central banking will create significant institutional and intellectual challenges.

China has high hopes for European ties
Li Keqiang (FT) May 1, 2012
Economically we can help each other. When ‘designed in Europe’ is combined with ‘made in China’ there will be amazing results.

Time to apply EM lessons to euro crisis
William R. Rhodes (FT) May 1, 2012
The introduction of new taxes on financial products will not help to restore much-needed confidence in the markets.

Beijing's Financial Scapegoat
WSJ May 1, 2012
A tycoon takes the fall for China's flawed banking system.

China's Vanishing Trade Imbalance
Eduardo Porter (NYT) May 1, 2012
As the Strategic and Economic Dialogue with China convenes this week, the United States will have a harder time proving that its deficit is China's fault.

Why a More Flexible Renminbi Still Matters
Kenneth Rogoff (Project Syndicate) May 2, 2012
Given the sharp drop in China’s current-account surplus, should the US, the IMF, and other players stop pressing China to move to a more flexible currency regime? The answer is “no,” because China’s economy is still plagued by massive imbalances, and a more flexible regime would provide an important stabilizer.

Canada, Japan, Mexico Press for Entry into Trans-Pacific Trade Talks
Bridges Weekly Trade News Digest Volume 16, Number 17 May 2, 2012
Six months after expressing interest in joining the proposed Trans-Pacific Partnership (TPP) Agreement, Canada, Japan, and Mexico have yet to join the nine-country talks, with a high-profile bilateral meeting in Washington between the US and Japanese heads of state on Monday ending without a formal announcement regarding Tokyo's bid. Current TPP members are said to be still evaluating whether it is feasible to take on new members while also trying to clinch a deal by year's end.

US Senate Agriculture Committee Passes Farm Bill; Cotton Spat Unresolved
Bridges Weekly Trade News Digest Volume 16, Number 17 May 2, 2012
The Farm Bill process passed another milestone last week, after the US Senate Agriculture Committee approved its version of the omnibus legislation that supports agriculture, conservation, and nutrition. The US Congressional Budget Office estimates that the proposed legislation will involve a US$26 billion reduction in spending over ten years.

UNCTAD XIII: Ministers Spar over Economic Crisis
Bridges Weekly Trade News Digest Volume 16, Number 17 May 2, 2012
The ongoing economic crisis took centre stage at the thirteenth ministerial meeting of the UN Conference on Trade and Development (UNCTAD XIII), as developed and developing countries sparred over how the UN agency should best tackle the crisis.

Lamy: Continue Moving in 'Small Steps' on Doha
Bridges Weekly Trade News Digest Volume 16, Number 17 May 2, 2012
Five months on from the eighth WTO ministerial conference, members are still looking at options for moving out of the Doha Round impasse, with the contentious issues of industrial market access and agriculture having seen little progress during recent negotiations in Geneva.

EU, Argentina Oil Company Row Gains Steam
Bridges Weekly Trade News Digest Volume 16, Number 17 May 2, 2012
Harsh words continue to fly between the EU and Argentina following Buenos Aires' nationalisation of Spanish-owned oil and gas company Repsol YPF, as the legislation associated with the takeover makes its way through the Argentine Congress. Meanwhile, in Geneva, Argentina's import policies have again come under fire at the WTO, with several members - including the US, EU, and Japan - criticising Buenos Aires' licensing process and requirements at a meeting last Friday.

Gold Standard for All, From Nuts to Paul Krugman
Amity Shlaes (Bloomberg) May 2, 2012
Nut cases. That’s what they are. And if you take an interest in them, you are a nut case, too.

Openness to international trade causes growth in sub-Saharan Africa
Markus Brückner & Daniel Lederman (VoxEU) May 2, 2012
The recent growth performance in sub-Saharan Africa has been remarkable given that, for over four decades since 1960, real GDP per capita growth had been dismal, averaging less than 0.5% per annum. This column, using within-country variation and instrumental variables, argues that increases in openness to trade are behind this performance.

Merkel can achieve fiscal union in Europe
Niall Ferguson and Pierpaolo Barbieri (FT) May 2, 2012
Last year’s compact is first step on the road to joint and several liability for eurozone sovereign debt.

Our central bankers are intellectually bankrupt
Ron Paul (FT) May 2, 2012
While socialism has largely been rejected, the myth persists that central banks are a necessary component of market economies.

Haircuts on repos will jeopardise recovery
Richard Comotto (FT) May 2, 2012
A mandatory haircut would not stop banks cutting back their credit line in another crisis, so why are regulators pushing such a flawed idea?

What Singapore Can Teach Us
Matt Miller May 2, 2012
Pragmatic problem-solving is its creed.

Don’t blame speculators
Robert J. Samuelson (WP) May 2, 2012
No connection between gas prices and oil futures.

Can governments control the supply of credit? Evidence from a UK policy experiment
Shekhar Aiyar, Charles W Calomiris & Tomasz Wieladek (VoxEU) May 3, 2012
How can governments limit excessive and unstable credit growth? Should they raise capital requirements for banks? This column looks at evidence from a policy experiment in the UK. It finds that UK-regulated banks did cut back on credit supply but that there was still ‘leakage’ from foreign banks.

LTRO: Quantitative easing in disguise?
Jean Pisani-Ferry & Guntram Wolff (VoxEU) May , 2012
The ECB has managed a massive expansion of its balance sheet with long-term refinancing operations. This has been called the equivalent of quantitative easing, as done by the Fed and the Bank of England. This column thus argues that the main obstacle for the ECB is not tight limits on the purchase of government bonds. Rather, it is the absence of a banking and fiscal union and the heterogeneity within the Eurozone that reduces the effectiveness of the ECB instruments.

Macro-prudential financial supervision and the ESRB: Underestimated potential
Bernhard Speyer (DB Research) May 3, 2012
The ESRB has kept a low profile in the first few months of its existence. However, this should not obscure the fact that the Board has the potential to be a very influential player. First of all, macro-prudential supervisory policy implies, by definition, the attempt to micro-manage capital allocation. Second, the ESRB is another EU institution monitoring economic policy in the EU member states. Third, macro-prudential policy might become a way to achieve regional differentiation of monetary policy and might thus play a part in the stabilisation of EMU.

Trading myths: Addressing misconceptions about trade, jobs, and competitiveness
Charles Roxburgh, James Manyika, Richard Dobbs and Jan Mischke (McKinsey Quarterly) May 3, 2012
An analysis of the performance of mature economies' tradable sectors: reality is often at odds with conventional wisdom.

The Violent, Scandalous Origins of JPMorgan Chase
David O. Stewart (Bloomberg) May 3, 2012
Americans like to imagine that the Founding Fathers were virtuous and civic-minded giants bestriding the continent. But many of them kept a sharp eye on the main chance, alert to opportunities for personal profit.

Asia flexes muscle with crisis fund boost
Anthony Rowley (Emerging Markets) May 3, 2012
Finance ministers agreed on Thursday to back a doubling of resources for a de facto Asian Monetary Fund, in another sign of Asia’s increasing self-reliance and clout

What we know now: the BoE’s past 15 years
Charlie Bean (FT) May 3, 2012
The evidence suggests that QE has worked, which is corroborated by studies of the Fed’s large-scale asset purchases.

Consider the small nations caught in the central bank crossfire
Gill Marcus (FT) May 3, 2012
It is time advanced economies did more to consider the effects of excessive and volatile inflows on emerging markets.

Beware pitfalls of rule-makers pursuing their agendas
Gillian Tett (FT) May 3, 2012
The debate over reform of the US money market sector offers an insight into whether regulators can create a more stable financial world

Will France Turn North, or Go South?
Dominique Moisi (NYT) May 3, 2012
The direction France takes now will be decisive for the European Union and the world economy.

Shattering the American dream: The US government’s Ponzi scheme
Richard Evans, Laurence J. Kotlikoff & Kerk L. Phillips (VoxEU) May 4, 2012
The sustainability of government finances is very much the topic of the day. But the issue poses serious questions for the future, particularly how well off today’s younger generations will be compared with their parents. This column argues that the Ponzi scheme being played by the US government amounts to "fiscal child abuse" and is close to game over. For today's children the American dream will be just that – a dream.

The cost of austerity
Harold Meyerson (WP) May 4, 2012
In Europe, the policy has completely backfired.

Growth versus austerity in euroland
Thomas Mayer & Jochen Mobert (DB Research) May 4, 2012
At the root of the recession in the euro area is a lack of confidence in the ability of individual countries to achieve the necessary economic flexibility required for a monetary union of regions with divergent economic developments and in the capability of EU institutions to manage the present crisis. The restoration of confidence is essential to end the recession and return to economic growth. The question therefore is not whether to give priority to fiscal austerity or economic growth but to find the optimal degree of austerity and structural reforms for the maximisation of confidence.

The Austerity Misdirection
Holman W. Jenkins Jr (WSJ) May 4, 2012
Fixed exchange rates are especially unforgiving of welfare states that destroy their ability to create wealth.

Forget Europe. Worry About India.
Tyler Cowen (NYT) May 5, 2012
India's growth is slowing and uneven, it is a difficult place to do business and it is risking another generation of millions of poor people as it fails to enact market reforms.

Inside the Machine: A Journey into the World of High-Frequency Trading
Michael Peltz (II) May 5, 2012
Two years ago this weekend, the now infamous Flash Crash saw the Dow Jones Industrial Average drop nearly 600 points in a matter of minutes, followed by an even faster rebound moments later.

The only solution to the eurozone crisis
Wolfgang Münchau (FT) May 6, 2012
The answer is a combination of debt monetisation through the European Central Bank and default into the European Stability Mechanism.

Those Revolting Europeans
Paul Krugman (NYT) May 6, 2012
How dare the French and Greeks reject a failed strategy!

Battle of the beards
Robert J. Samuelson (WP) May 6, 2012
Paul Krugman vs. Ben Bernanke.

Europe’s Opportunity in Hollande
Martin Schulz (Project Syndicate) May 7, 2012
François Hollande’s victory in the French presidential election is a fresh chance for Europe. It should spell the end of a policy oriented exclusively towards austerity, which has paralyzed our economies and divided the EU, and should not scare anyone – certainly not the financial markets.

Connecting to the Future
May 7, 2012
India has now overtaken the US as the world’s second-largest telephone market, and is projected to overtake China before the end of 2012. Indeed, the cellphone has empowered the Indian underclass in ways that 45 years of talk about socialism singularly failed to do.

The Future of Ideological Conflict
Steve Fuller (Project Syndicate) May 7, 2012
Some have argued that ideologies and parties are irrelevant in an increasingly fragmented political landscape. But one division that looms on the horizon could reinvent the right-left distinction for the twenty-first century: precautionary versus “proactionary” attitudes toward risk as principles of policymaking.

After Austerity
Joseph E. Stiglitz (Project Syndicate) May 7, 2012
So many economies are vulnerable to natural disasters – earthquakes, floods, typhoons, hurricanes, tsunamis – that adding a man-made disaster is all the more tragic. The pain that Europe, especially its poor and young, is suffering as a result of its leaders’ willful ignorance of the lessons of the past is entirely unnecessary.

Europe’s Misguided Search for Growth
Daniel Gros (Project Syndicate) May 7, 2012
In short order, the eurozone’s attention has shifted from austerity to growth. This is a recurring pattern in European politics: austerity is proclaimed and defended as the pre-condition for growth, but then, when a recession bites, growth becomes the pre-condition for continued austerity.

Central Bank reserve creation in the era of negative money multipliers
Manmohan Singh & Peter Stella (VoxEU) May 7, 2012
Are central banks printing vast quantities of money? This column explains how money-multiplier economics (central banks create reserves that allow commercial banks to create money) no longer holds. Today, non-bank financial institutions play a pivotal role in money/liquidity creation, but hold no reserves. Their lending depends on “private reserves”, mainly highly liquid government securities. Creating more ‘public’ reserves by buying such ‘private’ reserves doesn’t trigger money creation – it just substitutes among reserve types. Open-market purchases only create money if they swap a monetary base for assets that are no longer accepted at full value as collateral in the market.

Monetary policy is no panacea for Europe’s ills
Jens Weidmann (FT) May 7, 2012
Emergency measures ease the transition to a healthier system. They must not become a convenient analgesic.

The real frontline of the Chinese in Africa
Terence McNamee (FT) May 7, 2012
The only way to prevent relations from worsening is for China to stop pretending its mass of small traders don’t exist.

Inequality is the real threat to Asia’s growth miracle
Changyong Rhee (FT) May 7, 2012
Children from the poorest quintile are up to five times less likely to attend secondary school than wealthier peers.

In Praise of the Beleaguered Euro
Amar Bhide (WSJ) May 7, 2012
Sovereign over-indebtedness and banking solvency are serious problems for Europe, but the common currency is doing its job just fine.

Time for an Asia Trade Breakthrough
Myron Brilliant (WSJ) May 7, 2012
The U.S. has fallen behind in the race to clinch new market-opening agreements.

Financial recoupling in emerging markets
Eduardo Levy Yeyati & Tomás Williams (VoxEU) May 8, 2012
In the 2000s, emerging economies reduced their business cycle co-movement with G7 economies. Did this macroeconomic autonomy enhance the relevance of local fundamentals as drivers of emerging market returns? This column argues it did not, due to the role of benchmarked institutional investors.

Central Bankers under Siege
Raghuram Rajan (Project Syndicate) May 8, 2012
Federal Reserve Chairman Ben Bernanke has gone further than any other central banker in recent times in attempting to stimulate the economy through monetary policy, yet many economists are calling for the Fed to raise its inflation target from 2% to 4%. There are many reasons why that is a bad idea.

Poor infrastructure smothers Asia’s growth
Henny Sender (FT) May 8, 2012
Governments that do not have the money to build roads, ports and power plants should take advantage of the financing being offered by regional banks

Jobs@Arabia.com
Thomas Friedman (NYT) May 8, 2012
A plan is taking hold for entrepreneurs, not government, to lead the way in creating new businesses in Jordan.

China's Soft Power Deficit
Joseph S. Nye (WSJ) May 8, 2012
To catch up, its politics must unleash the many talents of its civil society.

The Rise of India's Soft Power
Rani D. Mullen & Sumit Ganguly (FP) May 8, 2012
It's not just Bollywood and yoga anymore.

Who Wants to Buy Honduras?
Adam Davidson (NYT) May 8, 2012
A small country's big decision to start from scratch. At least in one city.

World food prices and protectionism
Paolo Giordani, Nadia Rocha & Michele Ruta (VoxEU) May 9, 2012
International food prices are on the rise and becoming increasing volatile, reaching crisis levels in recent years. This column argues that one overlooked reason for this is the rise in protectionist policies aimed at restricting food exports.

Steering Clear of the Euro Precipice
Yannos Papantoniou (Project Syndicate) May 9, 2012
Renewed turbulence in the eurozone bond market underlines the need to reappraise current policies for overcoming Europe’s sovereign-debt crisis. Given Europe’s current political balance, and taking into account its time-honored tradition of muddling through, several minimum requirements stand out.

Rebuilding Through Reform: How to Ensure Global Financial Stability
Esther L. George (Globalist) May 9, 2012
While policymakers are busy trying to mitigate the damage of the recent financial crisis, they also need to be thinking ahead to the next crisis. Policymakers should ask what really went wrong last time — and what can be done to build a more resilient financial system for the future.

Giving the Well-Performing State Its Due
Ana Palacio (Project Syndicate) May 9, 2012
Capitalism’s success depends not only on macroeconomic policy or economic indicators. As examples around the world show, it rests on a bedrock of good governance and the rule of law – in other words, a well-performing state.

Consensus Proves Difficult as Rio+20 Conference Approaches
Bridges Weekly Trade News Digest Volume 16, Number 18 May 9, 2012
The Rio+20 negotiation process has entered the final stages, with less than six weeks remaining before the UN Conference on Sustainable Development (UNCSD) kicks off. Delegates held a two-week negotiating session from 23 April - 4 May in New York with the aim of finalising the outcome document for the June gathering; however, the slow pace of progress has led to a new session being scheduled for later this month in the hopes of achieving greater consensus ahead of the conference.

G-20 Report Says Trade Reform Could Help Boost Farm Yields
Bridges Weekly Trade News Digest Volume 16, Number 18 May 9, 2012
Governments should curb farm subsidies and discipline import and export restrictions in order to boost farm productivity, according to a confidential report by international agencies for the leaders of the G-20 group of major economies.

Bayer Challenges India Compulsory License Ruling
Bridges Weekly Trade News Digest Volume 16, Number 18 May 9, 2012
German pharmaceutical company Bayer AG has formally lodged a challenge against a landmark Indian ruling that allowed a domestic generic drug-maker to produce a low-cost version of an anti-cancer drug for the Indian market. The appeal was filed on Friday 4 May with India's Intellectual Property Appellate Board.

Brussels Response to Repsol Takeover Forthcoming, EU Trade Chief Cautions
Bridges Weekly Trade News Digest Volume 16, Number 18 May 9, 2012
The 27-member EU bloc is ready to take action against Argentina, European Trade Commissioner Karel De Gucht said on Monday 7 May, in response to Buenos Aires' controversial expropriation of Spanish-owned oil company Repsol YPF. The announcement comes just days after the Argentine decision was signed into law.

Washington IP 'Priority Watch List' Sparks Mixed Response
Bridges Weekly Trade News Digest Volume 16, Number 18 May 9, 2012
The US has released its annual report listing countries that allegedly deny "adequate and effective" protection of intellectual property, placing over a dozen of its trading partners - including Canada, China, India, and Russia - on its "priority watch list." While industry groups applauded the report, some civil society groups cautioned that it may have been too heavily influenced by industry lobbying.

Desperately seeking a bailout for Spain and its banks
Nouriel Roubini and Megan Greene (FT) May 9, 2012
Bank bailouts may bring the Spanish state to its knees. If they don’t, Spain’s public and external debt will.

My lessons from life as a Chinese central banker
David Daokui Li (FT) May 9, 2012
Respect investor sentiments, but work steadily and patiently against them. These are actually the most important drivers of economic fluctuations.

Singapore’s next frontier
Matt Miller (WP) May 9, 2012
And why China and the U.S. will be watching.

Shadow economies around the world: Model-based estimates
Ceyhun Elgin & Oguz Oztunali (VoxEU) May 10, 2012
Shadow economies – sometimes called the black market or informal economy – exist in every country. But how big are they? This column presents some new approaches to estimating their size and uses them to compare shadow economies across rich and poor countries over the last 60 years.

Shock-Proofing Asia’s Economies
Noeleen Heyzer (Project Syndicate) May 10, 2012
Rapid GDP growth, significant fiscal room for maneuver, and increasing economic cooperation make the Asia-Pacific region’s prospects for 2012 brighter than almost anywhere else. If its economies build resilience and pursue a sustainable pathway to shared prosperity, the region will thrive, despite sustained global uncertainty.

No hope for Europe
Nita Ghei (WT) May 9, 2012
The victory of socialist Francois Hollande in France on Sunday and the resounding defeat of the parties trying to push through bailouts in Greece amount to a clear rejection of austerity in Europe. That's particularly troubling because the Continent has never actually tried to reduce its spending.

A vision for global healthcare
Devi Shetty (Aljazeera) May 10, 2012
The founder of the Naraynana Hrudayalaya describes a vision that could see India disassociate healthcare from affluence.

China's Big Banks Look More Like Paper Tigers
Jonathan Weil (Bloomberg) May 10, 2012
After spending time combing through the financial reports of China’s biggest publicly traded, state- owned banks, I now understand what Jim Chanos, the famous short- seller, means when he keeps saying they are “built on quicksand.” He’s definitely on to something.

A cautionary tale of inflation and growth
Mark Carney (FT) May 10, 2012
A world in which inflation remains low, stable and predictable for long risks repeating the mistakes that led to the last crisis.

A real alternative to austerity economics
Samuel Brittan (FT) May 10, 2012
We should target nominal GDP to leave room for real growth but limitinflationary take-off

Awaiting the Next Revolution
David Satter (WSJ) May 10, 2012
Russia is a country in which the population has no respect for the political system, their rulers, or the distribution of property.

Russia’s national income in war and revolution, 1913 to 1928
Mark Harrison & Andrei Markevich (VoxEU) May 11, 2012
At the start of the 1920s, Russia’s economy suffered the greatest economic catastrophe of a turbulent 20th century. This column argues that measuring this experience yields lessons for the relationship between state capacity, government policies, and economic development.

Euro-coupons: Mutualise the interest payments, not the principal
João Fonseca & Pedro Santa-Clara (VoxEU) May 11, 2012
Eurobonds have been proposed as a solution to the crisis, but Germany is wary of guaranteeing the entire debt of EZ countries. This column suggests the more politically feasible Euro-coupon solution. EZ countries would issue bonds at market interest rates and transfers between countries would harmonise the effective interest rates.

Is Europe on a Cross of Gold?
Barry Eichengreen (Project Syndicate) May 11, 2012
Increasingly, one hears predictions that the euro will go the way of the gold standard in the 1930’s, and, increasingly, the reasoning behind such forecasts seems persuasive. But there are four reasons why the euro doomsayers may not be right.

Doing Development Better
Dani Rodrik (Project Syndicate) May 11, 2012
The recent selection of Jim Yong Kim to lead the World Bank exposed a deep fissure within the field of development policy, because Kim and his rivals represented two dramatically different approaches. But there are signs that the rift between Kim's brand of bottom-up development and those who favor economy-wide reforms is narrowing.

What matters for financial development?
Eduardo Cavallo & Carlos Scartascini (VoxEU) May 12, 2012
For some commentators, the recent financial crises are a sign that financial development has gone too far. Yet there are still countries where such concerns are the stuff of dreams. This column focuses on why the level of financial development in poor countries remains so low and what policymakers can do about it.

Greek Tragedy
Arianna Huffington (NYT) May 12, 2012
Greece has always been devoted to its children. When the future of those children is diminished, the future of the country will be diminished, too.

Global value chains, trade, jobs, and environment: The new WIOD database
Hubert Escaith & Marcel Timmer (VoxEU) May 13, 2012
Global value chains and the international fragmentation of production challenge well-established trade policy models and raise new issues. Yet research has been hindered by the limited availability of proper statistics. This column introduces the World Input-Output Database (WIOD), a new public data source that offers unique opportunities to study the effects of fragmentation on a range of socioeconomic and environmental issues.

Default now or default later?
Wolfgang Münchau (FT) May 13, 2012
By following the bailout programme, Greece will suffer a decade of depression and a possible breakdown in democracy.

Liquidity Risk and Credit in the Financial Crisis
Philip E. Strahan (FRBSF) May 14, 2012
The 2007–08 financial crisis was the biggest shock to the banking system since the 1930s, raising fundamental questions about liquidity risk. The global financial system experienced urgent demands for cash from various sources, including counterparties, short-term creditors, and, especially, existing borrowers. Credit fell, with banks hit hardest by liquidity pressures cutting back most sharply. Central bank emergency lending programs probably mitigated the decline. Ongoing efforts to regulate bank liquidity may strengthen the financial system and make credit less vulnerable to liquidity shocks.

As European Austerity Ends, So Could the Euro
Peter Boone and Simon Johnson (Bloomberg) May 14, 2012
The euro currency is a malady that condemns at least a generation of Greeks, Italians, Spaniards, Portuguese and Irish to the economic infirmary.

The impossible hope of an end to austerity
Charles Wyplosz (VoxEU) May 14, 2012
With French and Greek voters rejecting austerity, politicians are once again taking the government spending debate seriously. This column argues that the voters are right – it is a bad idea to tighten fiscal policy when growth is so feeble. But the column adds that, wherever one looks, the road away from austerity looks desperately blocked.

US debt issuance since 1951 and the fallacy of issuing floating rate notes
Manmohan Singh & Peter Stella (VoxEU) May 14, 2012
Much of the debate over public finances in the US relates to the amount of debt, this column explores the type of debt. It criticises the recent suggestion that the US Treasury should start issuing floating rate notes.

The Myth of Chinese Meritocracy
Minxin Pei (Project Syndicate) May 14, 2012
One enduring myth debunked by the fall Bo Xilai, the former Communist Party boss of Chongqing, is that the Party’s rule is based on meritocracy. Contrary to the prevailing Wetsern perception, China's government is riddled with clever apparatchiks like Bo who have acquired their positions through cheating, corruption, and patronage.

Rebalancing the Eurozone
Kemal Dervis (Project Syndicate) May 14, 2012
As long as the eurozone's internal divergence in unit labor costs persists, the euro crisis cannot be fully resolved, because current-account deficits and/or slow growth will continue to stalk the “south,” perpetuating worries about sovereign debt and commercial banks. But the burden of adjustment cannot rest solely on the south.

Greece’s exit may become the euro’s envy
Arvind Subramanian (FT) May 14, 2012
The historical record – from Korea, Indonesia and Russia – shows clearly that there is life after financial crises.

Beware the new Beijing-Berlin bond
Hans Kundnani and Jonas Parello-Plesner (FT) May 14, 2012
China wants a Europe that stands up to the US and Germany is a way of achieving that aim.

New Africa or New Hype?
Ioannis Gatsiounis (NYT) May 14, 2012
Africa is making real progress, but it is not the miracle the media are celebrating.

Africa and the Power of the Pivot
Iam Bremmer (NYT) May 14, 2012
Developing countries must avoid depending on one ally for security and prosperity. Africa shows the power of such resilience.

How Keynes would solve the eurozone crisis
Marcus Miller and Robert Skidelsky (FT) May 14, 2012
For a country in such desperate straits as Greece, an orderly exit from the euro looks the best option.

The dogma of ‘credibility’ endangers stability
John Kay (FT) May 14, 2012
The credibility the models describe is impossible in a democracy. Worse, the attempt to achieve it threatens democracy.

India’s growth threatened by old abuses
James Crabtree (FT) May 14, 2012
The system governing economic reform and investment has broken down, at a time when foreign capital is needed to fund the current account deficit.

ECB’s dilemma on the euro rescue
Gene Frieda (FT) May 14, 2012
The dwindling pool of ‘good’ bank collateral raises doubts about how long the eurozone’s crisis response can muddle along.

Democracy and the Euro
WSJ May 15, 2012
Greeks have to face the consequences of their own political choices.

Leaving the Euro May Be Better Than the Alternative
Eduardo Porter (NYT) May 15, 2012
Despite the turmoil that would result, staying the course has its own risks.

If Greece Quits Euro, Its Ruin Will Be Pointless
Clive Crook (Bloomberg) May 15, 2012
The chaos in Greece has resumed and a new election that nobody expects to resolve anything looms. Exasperated European Union officials have begun openly discussing the country’s exit from the euro currency system. This is a grave mistake. Greece’s exit would be no less catastrophic than when the EU called it unthinkable -- and not just for Greece.

The housing market and the case for higher inflation targets in the US and the Eurozone
Joshua Aizenman & Menzie D. Chinn (VoxEU) May 15, 2012
Might more inflation be good for the US and Europe? This column looks at the housing market in the US and argues that, with houses dropping in price, buyers are playing a waiting game. And as buyers keep delaying, the price drops further. Given the importance of property in many economies, the knock-on effects are severe. Yet one way to break this vicious cycle is with inflation.

Regional integration and natural resources: Who benefits?
Céline Carrère, Julien Gourdon & Marcelo Olarreaga (VoxEU) May 15, 2012
Regional integration schemes that include natural-resource-abundant countries have by and large been unsuccessful. Part of the reason is the uneven distribution of gains when resource-poor and resource-rich countries integrate. This column presents new evidence suggesting that the slow progress of regional integration efforts in the Middle East and North Africa can be explained by the reluctance of resource-rich countries to enter into trade agreements that will hurt them.

Secular Outlook: Policy Confusions & Inflection Points
PIMCO May 15, 2012
During this important annual event, PIMCO colleagues from around the world debate the major trends that will play out over the next three to five years, focusing not on what should happen, but what is likely to happen. Based on the 2012 Secular Forum discussions, we expect three themes to play out: continued policy and political confusion, overly incremental public and private sector responses and, therefore, greater potential for inflection points. In terms of regions, the status quo is no longer an option for Europe. The higher probability outcome – though not dominant – is a smaller and less imperfect eurozone. The journey would be bumpy and expensive; and it would require much more responsive and agile policymaking. Thus, the horrible risk of eurozone fragmentation is not de minimis. The U.S. will look good relative to Europe, outperforming in terms of growth and financial stability; but, amid political scrimmages rather than grand bargains, concerns will remain about growth, jobs, inequality, debt and deficits. Financial repression will persist as growth proves insufficient to quickly and safely delever segments that are over-indebted. Emerging economies, meanwhile, will continue to outpace both Europe and the U.S. over the secular horizon. Their path of expansion and convergence will be more volatile, especially as some countries undertake needed and tricky transitions in their growth models (including China). Portfolio implications: Maintain a sizable quality bias for sovereigns and corporate credits; supplement high-quality equity positioning (low financial leverage, high operating margins, and growth exposure) with dividend streams, where possible, as a means of de facto shortening duration; consider real assets to guard against confiscation risk; expand risk management to include cost-effective tail hedging; and evolve strategies, guidelines, dividing lines and mindsets that have guided investing in the past but will likely be challenged in the context of inflection dynamics.

America’s G-Zero Moment
Ian Bremmer (Project Syndicate) May 15, 2012
In advance of the upcoming G-8 summit, it is impossible to overlook the fact that, for the first time in seven decades, the US cannot drive the global agenda or provide leadership on all of today’s most pressing problems. Paradoxically, this new environment is less troublesome – and even ripe with new opportunities – for the US.

The Eurozone crisis: Fiscal fragility, external imbalances, or both?
Pietro Alessandrini, Michele Fratianni, Andrew Hughes Hallett & Andrea F Presbitero (VoxEU) May 16, 2012
Unsustainable debt along Europe’s periphery is bringing the euro to breaking point. But this column argues that this is not simply the result of fiscal ill-discipline. After 2010, the Eurozone crisis went from a fiscal crisis to a balance-of-payments crisis – with different prescriptions for policy.

Greece’s predicament: Lessons from Argentina
Peter Kretzmer & Mickey Levy (VoxEU) May 16, 2012
Greece’s economic and financial crisis is quickly deteriorating and there is no strategy – or even a coalition government – to figure out what to do next. This column looks at the lessons from Argentina’s default in 2001 and argues that Greece’s road to necessary economic reforms, fiscal sustainability and recovery may be even more daunting.

Greasing the wheel: Oil’s role in the global crisis
Lucas Chancel & Thomas Spencer (VoxEU) May 16, 2012
Between January 2002 and August 2008, the nominal oil price rose from $19.7 to $133.4 a barrel. This column gathers evidence on the role of this rise in prices in the global crisis. It suggests that oil prices had a direct impact on household expenditure on gasoline and increased mortgage delinquency rates. It adds that it also had many indirect impacts, notably though interest rate increases due to monetary policy.

The Smartest Ways to Save the World
Bjørn Lomborg (Project Syndicate) May 16, 2012
If you had $75 billion to spend over the next four years and your goal was to advance human welfare, especially in the developing world, how could you get the most value for your money? An expert panel of economists, including four Nobel laureates, would tell you to invest mainly in nutrition and reduction of chronic disease.

The Death of Inflation Targeting
Jeffrey Frankel (Project Syndicate) May 16, 2012
Inflation targeting by central banks, a hugely popular monetary-policy anchor around the world, died in September 2008, when it became clear that those who had been relying on it had not paid enough attention to asset-price bubbles. But its death was never announced, owing to uncertainty over what should succeed it.

Africa Must Diversify to Create More Jobs, Says Okonjo-Iweala
IMF Survey May 16, 2012
African countries should rebuild their fiscal buffers and diversify their economies away from commodities in order to protect themselves from another possible global downturn, says Nigerian Finance Minister Ngozi Okonjo-Iweala. She adds that Africa should not be in the business of importing food.

Bond Market May Not Warn When Debt Crisis Strikes
Caroline Baum (Bloomberg) May 16, 2012
One by one, European nations are letting their voices be heard, tossing out the party in power and voting in those who, in some cases, have a more radical agenda or, in others, are just willing to say “no” to the status quo. A bas l’austerite! Down with austerity! Up with growth!

The only way to contain a Greek exit
Lorenzo Bini Smaghi (FT) May 16, 2012
If Europe is to protect itself against irrational behaviour, it must strengthen its own institutions and rules.

Only the IMF can break euro logjam
Charles Goodhart (FT) May 16, 2012
The fund played a crucial role in reform in developing countries for which there was no internal political will – it must do the same in the eurozone.

Time running out for Greece
WT May 16, 2012
The forces of big spending will have another shot at the polls next month in Greece. The Syriza party, which is strongly opposed to austerity programs, is expected to gain in the upcoming election. Unfortunately for the long-suffering Greek taxpayers, opposition to austerity means, in all probability, that Greece will remain stuck in the recessionary spiral that's dizzied the nation for the last four years.

Greece Must Exit
Nouriel Roubini (Project Syndicate) May 17, 2012
The Greek euro tragedy is reaching its final act: it is clear that either this year or next, Greece is highly likely to default on its debt and exit the eurozone.Like a doomed marriage, it is better to have rules for the inevitable breakup that make separation less costly to both sides.

Who is Responsible for the Greek Tragedy?
Mohamed A. El-Erian (Project Syndicate) May 17, 2012
With a traumatic implosion – economic, financial, political, and social – now taking place in Greece, we should expect heated debate about who is to blame for the country's deepening misery. There are four suspects – all of them involved in the spectacular boom that preceded what will prove to be an even more remarkable bust.

Truth behind Japan’s free and open market
Clyde Prestowitz (FT) May 17, 2012
A Japanese negotiator can claim his market is fully open, safe in the knowledge that no products will be imported.

Apocalypse Fairly Soon
Paul Krugman (NYT) May 17, 2012
As Europe jogs toward its endgame, the euro could still be saved. But that would require major changes from European leaders.

A Greek Exit? Euro Zone May Be Ready
Binyamin Appelbaum (NYT) May 17, 2012
Years of foot-dragging and brinkmanship have prepared the currency union for life without Greece.

Meet the GUTS
Bruce Jones and Thomas Wright (FP) May 17, 2012
The West isn't declining. Here are four world powers enjoying an astonishing renaissance.

Fiscal spending and growth: New evidence
Céline Carrère & Jaime de Melo (VoxEU) May 17, 2012
It is not just the OECD countries where fiscal policy is the subject of fierce debate. This column presents results from an “event analysis” carried out on a database of 140 countries over the period 1972-2005. It suggests that, for developing countries at least, a fiscal stimulus can be effective – provided the rest of the economy is stable and the fiscal deficit is low.

Hume on hold? Consequences of not abolishing Eurozone national central banks
Michael Burda May 17, 2012
The EZ crisis reveals critical flaws in the Eurozone’s design. This column argues that failing to abolish national central banks left the door open for national interests to interfere with the natural workings of the financial system and Hume’s adjustment mechanism. This flaw – and the omission of a European Banking Authority with real teeth – will come back to haunt Europe in the months and years to come.

The US and the EU: Capitalism Compared
Stephan Richter (Globalist) May 18, 2012
Even though the eurozone hangs in the balance, in this age of global democracy, the failings of U.S. capitalism are actually bigger than Europe's.

China’s Misrule of Law
Michael A. Fitts & Amy Gadsden (Project Syndicate) May 18, 2012
Even if a way out of the diplomatic debacle involving Chinese human-rights activist Chen Guangcheng is at hand, much about the case remains troubling. In particular, despite more than three decades of legal reform in China, Chen had little recourse to fight harassment and house arrest at the hands of the Chinese authorities.

The Paradox of China’s Reform
Jamie F. Metzl (Project Syndicate) May 18, 2012
If China’s national imperative today is reform, the greatest threat to that goal is the massive influence and institutionalized corruption of the country’s entrenched elites. That is why the Chinese government’s dance around the Bo Xilai scandal has been so complicated.

A Breakthrough Opportunity for Global Health
Joseph E. Stiglitz (Project Syndicate) May 18, 2012
Every year, millions of people die from preventable and treatable diseases, especially in poor countries. But there are now opportunities for change, most promisingly through an effort headed by the World Heath Organization to fix the broken intellectual-property regime that constrains the development and availability of cheap drugs.

Germany should follow in the footsteps of China
Kamil Yilmaz (VoxEU) May 19, 2012
Germany’s fiscal response to the crisis was timid compared with those of China and the US. This column uses business-cycle connectedness indices to show that Germany should follow in the footsteps of China and increase its domestic spending so that it will generate net positive connectedness to others. Germany was able to increase its exports thanks to the fact that countries like the US, China and Japan stimulated domestic spending significantly.

Developing country and emerging market vulnerability to the Eurozone crisis
Joshua Aizenman, Yothin Jinjarak, Minsoo Lee & Donghyun Park (VoxEU) May 19, 2012
The Eurozone debt crisis has emerged as the single biggest threat to the global outlook. Applying event study methodology, this column estimates the responsiveness of equity and bond markets in developing countries and emerging markets to crisis news between 2005 and 2011. Whereas global crisis news had a consistently negative effect on equities and bonds, the Eurozone crisis looks thankfully more mixed and limited, so far.

The B in BRICS: The Brazil backlash
Economist May 19, 2012
Its strengths are real, but the government should worry more about its weaknesses.

Trade and inequality: New insights from Brazil
Elhanan Helpman, Oleg Itskhoki, Marc Muendler & Stephen Redding (VoxEU) May 20, 2012
What is the effect of trade on inequality? This column presents a unique study examining wage inequality in Brazil after liberalisation. Starting from a closed economy, the column finds that wage inequality will initially rise as only some firms take advantage of the new opportunities. But as trade costs continue to fall and more firms start to trade, wage inequality peaks and begins to fall back.

China’s economic rise: opportunity or threat for East Asia?
Yukon Huang (East Asia Forum) May 20, 2012
The consequences of China’s economic development for the West are being closely watched, but the impact of China’s growth for its immediate neighbours is no less important.

The only way to stop a eurozone bank run
Wolfgang Münchau (FT) May 20, 2012
It would be economically irrational for savers to keep their money in Greece under the present circumstances.

Europe Can Spend Its Way to Growth
Hannes Swoboda (WSJ) May 20, 2012
A financial transaction tax and a more efficient fight against tax evasion could channel additional funds into national treasuries.

Why China Won’t Rule
Robert Skidelsky (Project Syndicate) May 21, 2012
Nowadays, many are asking whether China is about to become the world’s next superpower. But the more sensible question is not whether China will replace the US, but whether it will start to acquire some of the attributes of a world power, particularly a sense of responsibility for global order.

Europe's Big Fat Greek Heart Attack
Mohamed A. El-Erian (FP) May 21, 2012
A diet can't save them now. Time to get that defibrillator ready.

A Global Economy in Danger
Manu Bhaskaran (YaleGlobal) May 21, 2012
China, Europe, Japan, US – 70 percent of the global economy – require swift G20 intervention.

Prioritize the Poorest
Robert Jenkins and Anthony Lake (FA) May 21, 2012
UNICEF officials explain why development approaches that emphasize equality are also the most cost-effective.

Rethinking global economic stimulus
David Walker (WT) May 22, 2012
I recently gave a presentation to more than 700 World Bank employees from more than 100 countries. In preparing for my speech, I was struck by the fact that several of the bank's largest donors - for example, the United States and Japan - have much greater fiscal challenges than some of its largest borrowers.

A fragile Europe must change fast
Martin Wolf (FT) May 22, 2012
If dismantling the single currency is out of the question, more rapid adjustment is needed to bring economies back to health.

Devaluation – last option to save the euro
Jeremy J. Siegel (FT) May 22, 2012
Raising taxes and cutting spending will only deepen recessions in eurozone periphery states – devalue the currency instead.

China Is Stimulused Out
WSJ May 22, 2012
The economy still has a hangover from the last blowout.

The Crisis of European Democracy
Amartya Sen (NYT) May 22, 2012
Reform on a well-thought-out timetable must be distinguished from reform done in extreme haste.

Crafting a Global Rescue for Europe
Gordon Brown (NYT) May 22, 2012
The failure of yet another international gathering has its origins in a fatal misdiagnosis.

The age of equality
Richard Pomfret (VoxEU) May 22, 2012
Politicians who rail against socialism or capitalism always adopt a more moderate stance after they come into office. This column argues this is because we are still experiencing the consequences of the industrial revolution. The current state of that process involves a widely accepted compromise between aggregate prosperity and distributional equality.

The Euro Awaits Its Verdict
Peter Boone & Simon Johnson (Project Syndicate) May 22, 2012
The creation of the euro just over a decade ago was a courageous and unique experiment. Today, the outcome – whether the euro will survive, and whether the Europeans are right to keep it – is very much in doubt, but perhaps for not much longer.

The looting of savers
Martin Hutchinson (AT) May 23, 2012
Savers, for too long robbed by governments, should be allowed a risk-free interest rate above the rate of inflation and offered a real return without investing in the likes of Facebook. Such a change in monetary policy by debt-burdened authorities probably won't happen until inflation gets seriously out of hand.

My Speech to the Finance Graduates
Robert J. Shiller (Project Syndicate) May 22, 2012
At this time of year, at graduation ceremonies in America and elsewhere, those about to leave university often hear some final words of advice before receiving their diplomas. For those contemplating a career in finance, the message is simple: the world needs you to reinvent the industry.

A Greek Exit Could Make the Euro Area Stronger
acob Kirkegaard (Bloomberg) May 23, 2012
A Greek exit from the euro area would inflict heavy damage in Greece and throughout Europe. It could also be one of the best things that ever happened to the currency union.

Is Europe ready for banking union?
Nicolas Véron (VoxEU) May 22, 2012
Many policymakers and academics are now agreed that a banking union, together with some form of fiscal union, is needed if the Eurozone is to emerge from the crisis in one piece. This column argues that while the current proposals for a banking union still need to be fine tuned, the crisis calls for swift and bold action.

The Syria Paradox
Adam Davidson (NYT) May 22, 2012
Aren't countries with diverse economies supposed to be good at deposing dictators?

When did the dollar overtake sterling as the leading international currency? Evidence from the bond markets
Livia Chitu, Barry Eichengreen & Arnaud Mehl (VoxEU) (VoxEU) May 23, 2012
Conventional wisdom states that the dollar took over as the leading international currency after the Second World War. This column presents new evidence from the bond markets suggesting it was much earlier in the 1920s. This implies that inertia and lock-in effects in international currencies are not all they’re cracked up to be and that the shift to a multipolar currency system might happen sooner than commonly believed.

Capital gains on international portfolios: New evidence from the Eurozone
Sebnem Kalemli-Ozcan & Bent E. Sørensen (VoxEU) May 23, 2012
News reports today are full of negative stories on the Eurozone. This column presents evidence of a much-overlooked benefit. The common currency has led to increased financial integration and in turn increased risk sharing, which helps to significantly reduce output shocks. Those arguing for a break up of the Eurozone should take note.

Why Do Economies Stop Growing?
Michael Spence (Project Syndicate) May 23, 2012
Many of the growth strategies tried around the world have turned out to have built-in limitations or decelerators – what one might call elements of unsustainability. Avoiding serious damage and difficult recoveries requires us to get a lot better at recognizing these self-limiting growth patterns early on.

US, EU Trade Chiefs Mull Options for Deepening Trans-Atlantic Ties
Bridges Weekly Trade News Digest Volume 16, Number 20 May 23, 2012
The US and EU should be open to pursuing a modest agreement on selected trade issues, should a broad, over-arching deal appear out of reach, US Trade Representative (USTR) Ron Kirk said on 22 May. The comments from the US' top trade official come just weeks after European Trade Commissioner Karel De Gucht made a public call for the two sides to finalise a comprehensive bilateral trade pact by mid-2014.

US-China Renewable Energy Row Escalates with Solar Duty Announcement
Bridges Weekly Trade News Digest Volume 16, Number 20 May 23, 2012
Trade frictions between Washington and Beijing over renewable energy are once again on the rise, following the 17 May announcement that the US Commerce Department would be imposing anti-dumping duties on solar panel imports from China.

Economic Powers Renew Push to End Hunger
Bridges Weekly Trade News Digest Volume 16, Number 20 May 23, 2012
Representatives of the world's economic and financial powers put food security on the international agenda at two separate events last week. In the US, G-8 leaders announced a new initiative to invest in African agriculture, while deputy G-20 agriculture ministers meeting in Mexico agreed on recommendations that are expected to be passed on to heads of state when they meet in June.

First EU EPA with an African Region Takes Effect
Bridges Weekly Trade News Digest Volume 16, Number 20 May 23, 2012
Brussels' first Economic Partnership Agreement (EPA) with an African region is now in effect, the European Commission (EC) announced last week. The four African countries involved in the trade and development agreement - Mauritius, Madagascar, Seychelles and Zimbabwe - are members of the twelve-country Eastern and Southern Africa (ESA) regional grouping.

It is in Greece’s interest to leave the euro
Costas Lapavitsas (FT) May 23, 2012
If the country leaves it will go through a crisis but will also have the opportunity to recover and reshape its society.

We must break up the failing euro
Martin Jacomb (FT) May 23, 2012
The essential requirement is a single, unequivocal decision to revert to national currencies, reached by all 17 governments.

Bond exodus on a par with eurozone bank run
Richard Milne (FT) May 23, 2012
Investors from abroad are leaving Italian and Spanish debt markets in droves and there is little evidence of the selling slowing down.

Greece's False Austerity
David Malpass (WSJ) May 23, 2012
The best outcome would be for Greece to stay in the euro, reduce government spending, and ask Europe for a mix of loans and gifts as it downsizes its government.

China’s economic crisis
Fareed Zakaria (WP) May 23, 2012
Breakneck growth is finally coming to an end.

An Exit From Europe Would Be Our Own Greek Tragedy
Panagis Vourloumis (Bloomberg) May 24, 2012
Greece is going through one of its periodic self-mutilations. After trying for decades to become a full member of the European Union, and succeeding, it’s doing its best to get thrown out.

Is the Euro Ending or Beginning?
Jean Pisani-Ferry (Project Syndicate) May 24, 2012
An environment of crisis is forcing Europeans to make choices that they did not want to envisage, much less confront, in quieter times. Depending on how they choose, recent developments could mark the beginning of the end for the euro – or the end of the beginning.

Summits that cap the west’s decline
Philip Stephens (FT) May 24, 2012
The rebalancing of global power was never going to be easy for the west but the speed of the turnround has been breathtaking.

A new Europe of competing currencies
Samuel Brittan (FT) May 24, 2012
People will not accept indefinitely a situation in which unused needs and unused hands exist side by side because of ‘austerity’.

Deus ex Eurobonds
WSJ May 24, 2012
Europeans are taking Alexander Hamilton's name in vain.

Confident China risks becoming arrogant
Kathrin Hille (FT) May 24, 2012
Intolerance towards outside world is increasingly coupled with sense that as China becomes great power again, it can afford to ignore others’ views.

Global Economy Learns to Absorb Oil Price Hikes
IMF Survey May 25, 2012
Despite a fourfold increase in oil prices over the past decade, the world has absorbed the price hikes with relatively little disruption due to fundamental changes in the workings of the global economy, and better policies to cope with the rise.

The Cooperative Alternative
Mahmoud Mohieldin (Project Syndicate) May 25, 2012
In an era in which conventional models of finance and corporate governance are being called into question, perhaps it is time to revisit the alternative approach taken by economic cooperatives. In addition to a humane vision, cooperatives embody a pragmatic approach to production that could help to spur economic growth.

Ireland’s Moment of Fiscal Decision
Lucinda Creighton (Project Syndicate) May 25, 2012
Once again, Europe is watching an Irish referendum with bated breath. Despite the economic pain that Ireland has endured since the financial crisis began, the Irish people understand that they need the EU if they are to recover and build on the country's sound fundamentals.

China tightens Brazil embrace
Fabiana Frayssinet (AT) May 25, 2012
China's deepening involvement in Brazil's energy industry helps the Asian giant secure oil supplies while pumping money into the Brazilian economy. The downside is a possible undermining of the South American country's long-term self-sufficiency.

Oil and Gas in Islam’s Faultline
Jamsheed K. Choksy & Carol E. B. Choksy (YaleGlobal) May 25, 2012
To control oil markets and power, Sunnis undercount Shiites – with US and EU help.

The unbearable lightness of being… a reversible reform
Nauro F Campos & Roman Horváth (VoxEU) May 26, 2012
What are the main reasons for reversals in the implementation of structural reforms? This column puts forward the novel idea that reversals in different reforms are driven by different factors. It also presents new and supporting evidence showing that: foreign direct investment inflows reduce the likelihood of privatisation reversals; worsened terms of trade increase the probability of external liberalisation reversals; and labour strikes propel reversals in price liberalisation.

France’s Broken Dream
Martin Feldstein (Project Syndicate) May 26, 2012
The European project has clearly failed to achieve what French political leaders have wanted from the beginning: instead of a sense of amity an unity in Europe, there is conflict. And, with German Chancellor Angela Merkel setting conditions for the eurozone, France’s ambition to dominate European policy has been thwarted.

Can China Escape the Low-Wage Trap?
James Fallows (NYT) May 26, 2012
Can China make it as a fully modern economy and society?

The EU’s implementation of Basel III: A deeply flawed compromise
Morris Goldstein (VoxEU) May 27, 2012
Europe’s banks are in bad shape. Slowing growth and rising capital adequacy ratios would stretch any bank. Doubts about sovereign debt and the Eurozone’s future may push some EU banks over the edge. Now the EU has decided how to implement the principles of the latest round of globally coordinated banking regulations – Basel III. This column argues that the EU has got it wrong.

Inflation-targeting and Forex intervention: Are two targets better than one?
Marcos Chamon, Atish R Ghosh & Jonathan D Ostry (VoxEU) May 27, 2012
Before the global crisis, central banks could reply ‘inflation targeting’ to virtually any question about their policymaking and the ‘Great Moderation’ seemed to back them up. The crisis has put a stop to this smugness. Central banks are now engaged in emergency evasive manoeuvres and are scrambling for new intellectual anchors. This column argues that emerging market central banks should view both price and exchange-rate stability as targets.

The Problem With Europe Is Not Just the Euro
Alan Wheatley (Reuters/NYT) May 28, 2012
The really big challenges to Europe's standard of living come not from the euro crisis, but from globalization, technological change and aging populations.

Institutional reform and the so-called resource curse
Erwin Bulte (VoxEU) May 28, 2012
The so-called resource curse suggests that resource booms are bad for development. One reason put forward is that fighting over resource rents leads to armed conflict. This column argues the evidence identifying resources as a cause of conflicts is weak and that the policy focus should be on institutional reform, rather than on resources per se.

Asia Exposed
Stephen S. Roach (Project Syndicate) May 28, 2012
For the second time in less than four years, Asia is being hit with a major external demand shock. This time it is from Europe, with financial and trade linkages leaving Asia highly vulnerable to a raging sovereign-debt crisis that threatens to turn a mild recession into something far worse.

Into the Great Unknown
Andrew Balls (PIMCO) May 28, 2012
Amid great uncertainty and huge challenges in Europe, it can be helpful to cut through all the detail and map out what we know and what we don’t know. This is at best depressing and, at worst, terrifying.

‘Whale’ makes a big splash on risk models
Pablo Triana (FT) May 28, 2012
JPMorgan’s $2bn trading loss puts the controversial value at risk model to the test and may even end up burying it altogether after highlighting its deficiencies.

Greece-Proofing China
Yu Yongding (Project Syndicate) May 28, 2012
Recently, the president of the European Commission, José Manuel Barroso, referring to a possible Greek exit from the eurozone, told the European Parliament that there is no “Plan B.” Barroso’s statement was meant to be reassuring, but China should have its own plan in place should Greece be forced to leave the eurozone.

Lessons for Europe’s disunion
Charles Lane (WP) May 28, 2012
The confederation is no longer solvent.

The Broken Legs of Global Trade
Jagdish Bhagwati (Project Syndicate) May 29, 2012
The failure to achieve multilateral trade liberalization by concluding the Doha Round means that the world lost the gains from trade that a successful treaty would have brought. But that is hardly the end of the matter: the failure of Doha will virtually halt multilateral trade liberalization for years to come.

The fiscal economics of a Greek exit
Daniel Gros (VoxEU) May 29, 2012
If Greece leaves the Eurozone, many expect that it that will be forced to default. This column argues that need not be the case.

Trade preferences that do not deny market access
Jaime de Melo & Alberto Portugal-Perez (VoxEU) May 29, 2012
Joining a global supply chain is one of the few ways for low-income countries to industrialise in today’s competitive market. Rules on their use of imported fabric therefore have important consequences for development. This column exploits a quasi-experimental situation to show that the gains from rich nations applying more relaxed rules on imported inputs are huge – six times greater than the simple act of removing tariffs.

Euro Bonds With Strings Are Europe's Best Way Forward
Clive Crook (Bloomberg) May 29, 2012
Whether Greece keeps the euro or abandons it, the European Union must strengthen its defenses against a wider attack on its monetary system, and soon.

Unilateral tariff liberalisation
Richard Baldwin (VoxEU) May 30, 2012
In the late 1980s, developing nations that had eschewed all forms of liberalisation began to cut their import tariffs unilaterally. This column explains how the communication-technology revolution was the shock that altered the political-economy equilibrium against infant-industry protection and in favour of joining international supply chains which involved tariff liberalisation.

Greek exit from the Eurozone: Neither inevitable nor desirable
Avinash Persaud (VoxEU) May 30, 2012
Should Greece leave the Eurozone? This column argues that aggressive restructuring of Greek debt within the Eurozone, rather than departure, is the best option.

Aid Works
Jeffrey D. Sachs (Project Syndicate) May 30, 2012
The critics of foreign aid are wrong. A growing flood of data shows that death rates in the poorest countries are falling sharply, and for a simple reason: aid aimed at improving health care works.

An Argentine Guide to the Greek Crisis
Andres Velasco (Project Syndicate) May 30, 2012
Policymakers in Europe seem to be surprised at the ongoing bank run in Greece (and the nascent run in Spain). They should not be: anyone familiar with emerging-market meltdowns knows that a financial crisis nearly always follows a fiscal crisis.

Preparing for the Green Exit
Emmanuel Guerin & Laurence Tubiana (Project Syndicate) May 30, 2012
With Europe's single currency on the precipice, the necessity of greater fiscal and economic coordination is clear, though this will take time. Even so, more can be done to smooth the fiscal and economic adjustments that must take place in the troubled countries on the eurozone’s periphery.

Argentine Import Policies Face EU Challenge at WTO
Bridges Weekly Trade News Digest, Volume 16, Number 21 May 30, 2012
The EU has lodged a formal complaint at the WTO regarding Argentina's import policies, the European Commission announced on Friday 25 May. The complaint comes after weeks of increasingly heated rhetoric between the two sides over a range of commercial issues, most recently regarding the South American country's import restrictions and its controversial expropriation of Spanish-owned oil company Repsol YPF.

China-US Sparring over Renewable Energy Intensifies
Bridges Weekly Trade News Digest, Volume 16, Number 21 May 30, 2012
US government support for six renewable energy programmes is inconsistent with WTO rules, China's Ministry of Commerce (MOFCOM) claimed in an announcement on Thursday 24 May, referring to the outcome of an internal investigation. The allegation marks the latest salvo in an ongoing row between the US and China over their respective renewable energy support policies.

Trade Facilitation, LDC Accession Dominate Agenda at Paris Trade Ministers' Meet
Bridges Weekly Trade News Digest, Volume 16, Number 21 May 30, 2012
With the overall Doha Round talks still at an impasse, approximately 20 trade ministers meeting on the sidelines of the Organisation for Economic Co-operation and Development's (OECD) Ministerial Council Meeting discussed the potential of soon finalising an agreement on trade facilitation and updated guidelines on WTO accession for the poorest countries. However, obstacles in both areas still remain, as some officials acknowledged privately.

No Shareholders’ Spring
Luigi Zingales (Project Syndicate) May 31, 2012
The ongoing global economic crisis is not only causing incumbent governments to lose elections; it is also shaking corporate boards. But major companies are fighting back, deploying armies of lawyers to undercut the growing wave of shareholder discontent that their managers face.

Myths about emerging markets, trade, and jobs
Richard Dobbs, Jan Mischke & Charles Roxburgh (VoxEU) May 31, 2012
Are emerging markets a threat to jobs and competitiveness for the industrialised countries? This column argues that such concerns are often based on myths. Armed with the facts, policymakers in mature economies should focus on the opportunities emerging markets present rather than viewing them as a threat.

Europe must prepare an emergency plan
Robert Zoellick (FT) May 31, 2012
Leaders need to be ready. There might not be time for meetings.

Oil, blood and the west’s double standards
Philip Stephens (FT) May 31, 2012
Recent history has weakened the capacity of leaders to effect change in the Middle East.

The sweet and sour of oil
Hossein Askari (AT) May 31, 2012
Headline oil prices reinforce the misleading public perception that all crude is the same and mask the varying economic and geopolitical importance of changes in price and availability. Nor does the scale of global needs for the fuel render it immune from market demand for other energy sources.

Bank Bailout Lessons
WSJ May 31, 2012
Beware the temptation of a European 'banking union.'

The Austerity Agenda
Paul Krugman (NYT) May 31, 2012
In America and in Britain, the push for austerity is not really about debt and deficits. It's about using deficit panic as an excuse to dismantle social programs.

Blame Game, European-Style
NYT May 31, 2012
Political leaders in Europe need to admit their countries' complicity in the financial crisis and tell their citizens the hard truths about what it will take to dig out.