Globalization: A Brief Overview
IMF Issues Brief May/Jun 2008
A perennial challenge facing all of the world's countries, regardless of their level of economic development, is achieving financial stability, economic growth, and higher living standards. There are many different paths that can be taken to achieve these objectives, and every country's path will be different given the distinctive nature of national economies and political systems. The ingredients contributing to China's high growth rate over the past two decades have, for example, been very different from those that have contributed to high growth in countries as varied as Malaysia and Malta.
Rock Star Economics
Aneil Kovvali (Harvard Political Review) Spring 2008
An unconventional plan to end poverty.
Blood Barrels
Michael Ross (Foreign Affairs) May/June 2008
The world has grown much more peaceful over the past 15 years -- except for oil-rich countries. Oil wealth often wreaks havoc on a country's economy and politics, helps fund insurgents, and aggravates ethnic grievances. And with oil ever more in demand, the problems it spawns are likely to spread further.
The Coming Euroinvasion
Moisés Naím (Foreign Policy) May/June 2008
First they came for the iPods. Then the Europeans snatched up condos in Manhattan. Now they’re coming for the companies.
A New Deal for Poor Farmers
Jeffrey D. Sachs (Project Syndicate) June 2008
Many poor, food-importing countries around the world have become desperate in recent months, as global prices of rice, wheat, and maize have doubled. Hundreds of millions of poor people, who already spend a large share of their daily budget on food, are being pushed to the edge. Food riots are mounting.
The Dollar Hits an Oil Slick
Martin Feldstein (Project Syndicate) June 2008
The rapid rise in the price of oil and the sharp depreciation of the dollar are two of the most noteworthy developments of the past year. The price of oil has increased by 85% over the past 12 months, from $65 a barrel to $120. During the same period, the dollar fell by 15% relative to the euro and 12% against the yen. To many observers, the combination of a falling dollar and a rise in oil prices appears to be more than a coincidence.
Bread and Bush-Bashing
Chris Patten (Project Syndicate) Jun 2008
I feel a little sorry for President Bush. Whatever his other many failings, he has a pretty good record on aid to poor countries, particularly in healthcare. True to form, he recently announced a big increase in US food aid – good for the hungry poor and good for American farmers.
Gambler’s Ruin
J. Bradford DeLong (Project Syndicate) Jun 2008
From Adam Smith (1776) until 1950 or so, capital was considered by economists to be absolutely essential for economic growth. You also needed a few good basic institutions. “Security of property and tolerable administration of justice,” as Smith put it.
Women and Development
Elizabeth M. King and Bjørn Lomborg (Project Syndiate) Jun 2008
A girl born in South Asia or sub-Saharan Africa faces a cruel double burden. She will grow up in a region beset by poverty, disease, war or famine. She will also confront these challenges with the added disadvantage of being female.
All Inequality Is Not Equal
Arthur Brooks and Charles Wolf, Jr. (FEER) Jun 2008
Challenging the widely held belief that less income inequality in a society is better than more.
Back to Basics on Asian Trade
Hal Hill and Jayant Menon (FEER) Jun 2008
Criticizing the proliferation of free trade agreements in Asia and propose alternatives.
Harvests of Hunger
Jomo Kwame Sundaram (Project Syndicate) Jun 2008
Lack of food is rarely the reason people go hungry. Even now, there is enough food in the world, with a bumper harvest this year, but more people cannot afford to buy the food they need. Addressing this growing crisis is the aim of the Global Conference on Food Security in Rome on June 3-5.
Japanese Lessons for China’s Currency
Mark DeWeaver (Project Syndicate) Jun 2008
The question of how much China’s currency should appreciate to rebalance its trade has become a global hot-button issue. But the answers have been all over the map, with some finding that the yuan is not undervalued at all, while others argue that it should appreciate against the dollar by more than 30%.
Scarcity in an Age of Plenty
Joseph E. Stiglitz (Project Syndicate) Jun 2008
Around the world, protests against soaring food and fuel prices are mounting. The poor – and even the middle classes – are seeing their incomes squeezed as the global economy enters a slowdown. Politicians want to respond to their constituents’ legitimate concerns, but do not know what to do.
Is There a New Washington Consensus?
Dani Rodrik (Project Syndicate) Jun 2008
Two and a half years ago, senior staff members of the World Bank approached the Nobel laureate Michael Spence to ask him to lead a high-powered commission on economic growth. The question at hand could not have been more important. The “Washington consensus” – the infamous list of do’s and don’ts for policymakers in developing countries – had largely dissipated. But what would replace it?
The Specter of Global Stagflation
Nouriel Roubini (Project Syndicate) Jun 2008
Will rising global inflation lead to a sharp global economic slowdown? Even worse, will it revive stagflation, that deadly combination of rising inflation and negative growth?
Beating the Oil Barons
Thomas Palley (Project Syndicate) Jun 2008
Over the past eighteen months, oil prices have more than doubled, inflicting huge costs on the global economy. Strong global demand, owing to emerging economies like China, has undoubtedly fueled some of the price increase. But the scale of the price spike exceeds normal demand and supply factors, pointing to the role of speculation – and underscoring the need for policy action to clean up the oil market.
Should Europe Regulate Sovereign Wealth Funds?
Roland Koch (Project Syndicate) Jun 2008
State-controlled investments from overseas – so-called sovereign wealth funds (SWFs) – are now the subject of intense debate. The United States and France have made their fears known. In Germany, too, the debate centers on SWFs’ political and economic significance for the country’s future.
Why free markets have little to do with inequality
Philip Whyte (FT) Jun 1, 2008
While market liberalisation does not increase social inequalities, the correlation between educational and social outcomes is striking.
The World Is Upside Down
Roger Cohen (NYT) Jun 2, 2008
It's time to invert our thinking, to see the developed world as depending on the developing world, rather than the other way around.
Japan: US$1.5 Trillion GPIF Reform and Outflows from Japan
Stephen Jen (MSDW) Jun 2, 2008
I believe that powerful factors will prevent USD/JPY from staying below 100 for long. The impending GPIF reform is a key example of how Japan’s financial home bias could decline further, keeping the JPY undervalued. Given the size of the AUM, I urge investors to watch the GPIF reform closely.
We cannot go on eating like this
Gideon Rachman (FT) Jun 2, 2008
On the subject of per capita consumption, western politicians struggle to find a convincing response to complaints from the developing world. But they will struggle just as hard to persuade their voters to cut back to accommodate the rise of a richer China and India.
There is no excuse for Britain not to join euro
Willem Buiter (FT) Jun 2, 2008
The UK punches below its weight because it is not a full member of the EU: if you are not in the single currency, you do not count.
The Panglossian World of Finance
Daniel Cohen (VoxEU) Jun 3, 2008
What easy money brought forth in the new century, tight credit will take away in the years to come. Here one of France’s leading economists explains the origins of the subprime crisis and why it is likely to continue to unfold.
Seduce Your Hot Latin Neighbor With a Trade
Alexandre Marinis (Bloomberg) Jun 3, 2008
It would take an act of bravery to call Brazilian President Luiz Inacio Lula da Silva a gatao, or hunk. That hasn't stopped him from seducing the most appealing of his Latin American neighbors with trade deals they can't resist.
Dollar surges as Bernanke speaks out
FT Jun 3, 2008
The dollar surged while oil and gold tumbled after Ben Bernanke surprised markets by making clear the Federal Reserve does not want the US currency to weaken any further because of the risks to inflation
Useful dos and don'ts for fast economic growth
Martin Wolf (FT) Jun 3, 2008
Achieving sustained, rapid growth turns out to be very hard. This is no objection to the findings of the Growth Report – it is, rather, an admission of how little we know about such a complex economic, social and political process.
Global trade talks at risk of failing before deadline
IHT Jun 4, 2008
Global trade talks have stumbled again after a frustrated mediator suspended negotiations over industrial goods, complaining that it was "pointless to continue" because diplomats were refusing to negotiate.
Cotton Clubbed
WSJ Jun 4, 2008
A blow to American credibility on trade.
The Panglossian approach to debt
John Gapper (FT) Jun 4, 2008
In the best of all possible worlds, covenant-light loans may well allow a company to go through a temporary dip in fortunes and then recover with no permanent harm done. But how can a debt-holder know that this will happen.
A party pooper's guide to financial stability
Charles Goodhart and Avinash Persaud (FT) Jun 4, 2008
If supervisors were paid bonuses, but only after successful oversight, they might be more willing to remove the punch bowl.
OECD sees slow growth through next year
IHT Jun 4, 2008
"With the strength of the headwinds facing OECD economies, the projected outcome is actually not that bad," the organization said.
At food crisis talks, menu is rich with politics
IHT Jun 4, 2008
It was supposed to be an emergency conference on food shortages, climate change and energy. But the powerful politicians from all over the world spoke mostly about economics and politics.
NAMA Chair Suspends Talks, Citing Utter Lack of Progress
BRIDGES Weekly Trade News Digest - Vol. 12, Number 20 Jun 4, 2008
The chair of the deadlocked WTO talks on manufacturing tariffs on 2 June suspended meetings of the negotiating group, telling delegates that further gatherings would be pointless following a week of discussions in which they did not seriously attempt to move towards a compromise.
Few Changes as WTO Farm Talks Continue
BRIDGES Weekly Trade News Digest - Vol. 12, Number 20 Jun 4, 2008
Delegates reportedly began "digging in" to negotiations on a deal to reduce subsidies and tariffs on agricultural products at a 3 June meeting that was open to the entire WTO Membership.
Disagreement on Content of Service Chair's Report
BRIDGES Weekly Trade News Digest - Vol. 12, Number 20 Jun 4, 2008
Potential WTO guidelines for the extent of future services trade liberalisation under a Doha Round agreement remained the subject of disagreement during a meeting of the negotiating committee this week.
The Buck Stops Where?
WSJ Jun 5, 2008
Bernanke discovers he and the world have a dollar problem.
Free the Farmers
Rod Hunter (WSJ) Jun 5, 2008
Human creativity is our greatest resource.
How to spend it: Sovereign wealth funds and the wealth of nations
Helmut Reisen (VoxEU) Jun 5, 2008
Sovereign wealth funds have raised fears in developed countries, but development economics suggests a number of legitimate motives for such investment vehicles. This column explains why there is no need for suspicion – only level-headed policy responses.
The $100 Distraction Device
Ray Fisman (Slate) Jun 5, 2008
Why giving poor kids laptops doesn't improve their scholastic performance.
Dollar Peg Should Be Buried to Beat Inflation
Michael R. Sesit (Bloomberg) Jun 6, 2008
It's time for emerging-market countries to ditch Bretton Woods II and either revalue their currencies against the dollar or let them float freely, which would probably achieve the same result.
Dollar Policy for Dummies, Dimwits and Dolts
Caroline Baum (Bloomberg) Jun 6, 2008
Regular readers know I'm tone deaf when it comes to the nuances of U.S. dollar policy. Whether it's a congenital defect or simply an aversion to the idea that the U.S. has anything resembling a dollar policy, I can't say.
Currencies: Policy, Commodity Prices and Currencies
Stephen Jen (MSDW) Jun 6, 2008
Verbal interventions by Secretary Paulson and Chairman Bernanke have direct implications for the USD and possibly more powerful USD implications through commodity prices. We see the USD reasserting itself hesitantly and asynchronously against different currencies.
Oil Prices Take a Nerve-Rattling Jump Past $138
NYT Jun 7, 2008
Friday's jump capped a second day of strong gains on energy markets, and fed suspicions that commodities might be caught in an investment bubble.
Europe Fears a Post-Bush Unilateralism, This Time on Trade
Eduardo Porter (NYT) Jun 7, 2008
Before America stumbles into a trade war, political leaders should examine how other wealthy democracies make trade more palatable to their workers.
A Different Consensus
WSJ Jun 7, 2008
Best world fix is: A) end global warming; B) Vitamin A and zinc.
We can reduce risk in the financial system
Timothy Geithner (FT) Jun 8, 2008
Banks and investment banks whose health is crucial to the global financial system should have a unified regulatory framework with capital and liquidity requirements.
Trichet justified in diverging from the Fed
Wolfgang Münchau (FT) Jun 8, 2008
In terms of global monetary policy, we are in the middle of a shift from a unipolar to a bipolar world.
This Global Show Must Go On
Tyler Cowen (NYT) Jun 8, 2008
The last 20 years have brought the world more trade, more globalization and more economic growth than in any previous such period in history. Few commentators had believed that such a rise in trade and living standards was possible so quickly.
Politics and Hunger
NYT Jun 9, 2008
At last week's United Nations food summit, the world's more-developed nations proved, again, that domestic politics trumps humanitarian concerns.
Fed Not in It to Back a `Strong Dollar' Policy
John M. Berry (Bloomberg) Jun 9, 2008
Strauss-Kahn Stresses Multilateral Approach to Global Crises
IMF Survey Jun 9, 2008
IMF head Dominique Strauss-Kahn urges policymakers around the world to seek a cooperative approach to global challenges stemming from the rise in food and fuel prices and a worldwide economic slowdown linked to spillovers from the United States.
Dubai's Favorite Senators
WSJ Jun 10, 2008
Congress tries to drive futures trading to foreign shores.
The Fed and the Price of Rice
Steve H. Hanke and David Ranson (WSJ) Jun 10, 2008
Commodites trade off of changes in the value of the greenback.
Emerging Markets: The Abundance Upgrade
Gray Newman (MSDW) Jun 10, 2008
The investment grade fever is as much a testament to the improved policymaking in many emerging economies as it is to the era of abundance that has benefited developing countries. But much more needs to be done within the emerging economies to tackle serious shortfalls on the micro front.
Sustaining growth is the century's big challenge
Martin Wolf (FT) Jun 10, 2008
Jeffrey Sachs has produced an analysis that manages to be both pessimistic and optimistic at the same time. One might not be quite as optimistic about the solutions. But one must recognise the salience of the challenges.
Are European bankers pushing up oil prices?
FT Jun 10, 2008
By continuing to remind us all of its inflation-busting credentials, the European Central Bank may be stoking inflationary pressures.
Oil prices: risks and opportunities
Francesco Lippi (VoxEU) Jun 11, 2008
High oil prices are back – more than $125 per barrel. Such prices are associated with the macroeconomic pains of the 1970s, but this column argues that the recent surge may actually be good news for developed economies’ industries. The logic lies in the difference between demand shocks and supply shocks.
Saving Doha
WP Jun 11, 2008
You have probably never heard of Pascal Lamy, but he might be able to save the world. The only question is when he should do it.
Lamy: 'Moment of Truth' for the Doha Round
BRIDGES Weekly Trade News Digest - Vol. 12, Number 21 Jun 11, 2008
Disagreement persists in global trade talks despite a growing resolve among some WTO delegations to bring an urgent conclusion to the negotiations. While most countries stress the importance of pressing forward in the talks, others argue that haste should not precipitate an unsatisfactory compromise on complex issues.
FAO Summit Attendees Commit to Eliminating Hunger, Securing Food for All
BRIDGES Weekly Trade News Digest - Vol. 12, Number 21 Jun 11, 2008
A major international conference recently concluded with a call to address the complex issues underlying the current food crisis, focusing both on short-term action, such as increasing food aid, and long-term action, such as investing in the agriculture sector in developing countries.
With the Clock Ticking, Countries Push for NAMA Consensus
BRIDGES Weekly Trade News Digest - Vol. 12, Number 21 Jun 11, 2008
Negotiators from several developed and developing countries kicked off talks in Geneva on Monday in a concerted push to revive struggling negotiations to reduce barriers to trade in industrial goods.
Subprime regulatory reaction and the value of the dollar
Kristin Forbes (VoxEU) Jun 12, 2008
To pay for its current account deficit and capital exports, the US needs $2 trillion of additional foreign investment in 2008. Recent research shows that the quality and depth of US capital markets are key to attracting such investment, but the subprime crisis has raised doubts. A judicious regulatory reaction to the subprime crisis will thus be critical to the value of the dollar. If the US imposes a massive increase in poorly thought-out regulation, the dollar could quickly return to its downward spiral.
Tosca hits at talk of trouble
FT Jun 11, 2008
A big London hedge funds suspects a speculative attack after several of its largest holdings plummeted amid rumours it was in trouble
Bickering will never feed the world
John Gapper (FT) Jun 11, 2008
Handled correctly, biological research could help to increase crop yields while reducing the thirst for chemicals and water. This could even help to prevent degradation of land and the environmental wastage in the developing world.
Oil Currency Hypocrisy
Kenneth Rogoff (Project Syndicate) Jun 2008
Does it make sense for United States Treasury Secretary Hank Paulson to be touring the Middle East supporting the region’s hard dollar exchange-rate pegs, while the Bush administration simultaneously blasts Asian countries for not letting their currencies appreciate faster against the dollar? Unfortunately, this blatant inconsistency stems from the US’s continuing economic and financial vulnerability rather than reflecting any compelling economic logic. Instead of promoting dollar pegs, as Paulson is, the US should be supporting the International Monetary Fund’s behind-the-scenes efforts to promote de-linking of oil currencies and the dollar.
American Aid Is Seized in Zimbabwe
NYT Jun 12, 2008
Food for schoolchildren was ordered to be given to backers of President Robert Mugabe, the U.S. ambassador said.
Auditing the ADB
WSJ Jun 12, 2008
The bank needs more independent oversight.
Appreciation for Chinese Consumers
Daniel Rosen (WSJ) Jun 12, 2008
Why a strong yuan is good for China.
Global: The Return of the Hawks
Joachim Fels & Manoj Pradhan (MSDW) Jun 12, 2008
The inflation genie is out of the bottle and we are likely to see higher average inflation rates – with higher highs and higher lows – in the next inflation cycle(s).
World Bank backs contentious director
FT Jun 11, 2008
Colin Bruce, the World Bank country director at the centre of a storm of controversy during Kenya’s post-election crisis, has been named as director of operations and strategy for Africa.
Control freaks
Economist Jun 12, 2008
Are “randomised evaluations” a better way of doing aid and development policy?
A Bull Market Sees the Worst in Speculators
NYT Jun 13, 2008
Hostility in Washington toward speculators is starting to worry people who know how commodity markets work.
IMF To Investigate Factors Behind Oil Price Surge
IMF Survey Jun 14, 2008
Responding to a call by G8 ministers, the IMF will prepare an analysis of the real and financial factors behind the recent surge in oil and commodity prices, their volatility, and the effects on the global economy, Managing Director Dominique Strauss-Kahn says in Osaka.
Tariff to Nowhere
Roger Lowenstein (NYT) Jun 15, 2008
According to Political Science 101, candidates run to extremes in primary season and crowd the center in November. A good test will be whether the apparent Democratic nominee, Barack Obama, tries to reclaim a moderate position on trade.
Surging Oil and Food Prices Threaten the World Economy, Finance Ministers Warn
NYT Jun 15, 2008
Finance ministers from the Group of 8 industrialized nations wrapped up a two-day meeting in Japan that was dominated by talk of rising petroleum prices.
Two Bubbles, Two Paths
Alan S. Blinder (NYT) Jun 15, 2008
Lately more and more people have been questioning the received wisdom about what a central bank should do when confronted by an asset price bubble. That piece of wisdom holds that deliberate bubble-bursting is something between impossible and dangerous — and thus best avoided. Instead, the Fed should let bubbles burst of their own accord, and then be prepared to mop up after.
The Fed, the dollar and wider price concerns
David Hale (FT) Jun 15, 2008
Congress and the White House should help resolve the financial crisis as it has become too great a burden for the Federal Reserve to handle alone.
Currencies: A Monumental Petro-Wealth Transfer
Stephen Jen (MSDW) Jun 16, 2008
We are witnessing the beginning of a huge transfer of wealth to oil-exporting countries, with geopolitical, economic and financial consequences. Saudi Arabia earns over US$1 billion a day from oil exports, and the GCC hold some US$65 trillion worth of oil reserves, most of which will be consumed and the GCC will have converted oil into paper assets of this amount.
Democracy and the military
Daron Acemoglu, Davide Ticchi & Andrea Vindigni (VoxEU) Jun 16, 2008
Encouraging democracy is one goal of most industrialised nations’ foreign economic policies. Formulating such policies requires an understanding of the political-economy logic governing democratic transitions. This column describes an important recent advance in theoretical thinking on the military’s role.
New Evidence on Government and Growth
Keith Marsden (WSJ) Jun 16, 2008
In the early 1980s, Ronald Reagan embraced the ideas of a small group of economists dubbed "supply-siders." They argued that lower taxes and slimmer government would stimulate growth, enterprise, harder work and higher levels of saving and investment. These views were widely ridiculed at the time, dismissed as "voodoo economics."
Nukaga, Silent on Currencies Since G-8, Avoids Dollar Comment
Bloomberg Jun 16, 2008
Japan's Finance Minister Fukushiro Nukaga declined to say whether he favors a stronger dollar, signaling the government may be reluctant to support gains in the U.S. currency that would add to the nation's import bill.
Euro shrugs off political turmoil after Irish vote
IHT Jun 16, 2008
The euro, the most tangible symbol of European unity, rose against the dollar Monday, the first full day of trading since the Irish rejected the Lisbon Treaty.
How best to manage global imbalances
Mohamed El-Erian (FT) Jun 16, 2008
The question for markets is no longer whether the global imbalances adjust. The focus should be on the collateral damage of adjustment.
How imbalances led to credit crunch and inflation
Martin Wolf (FT) Jun 17, 2008
What explains the combination of a 'credit crunch' in the US with soaring commodity prices and rising inflation across the globe? Are these related events? So far this is not a return to the 1970s. But action is needed to keep this true.
There is a better way to stop bank failures
John Kay(FT) Jun 17, 2008
It seems absurd to design a monitoring or regulatory system on the premise of normality, but that is what we routinely do.
Saudi Arabia should ditch its dollar peg
Martin Feldstein (FT) Jun 17, 2008
The inflation problem in the Gulf region, which is hitting low-income workers, is exacerbated by the fixed exchange rate policy.
World refugee population jumps to 11.4 million
IHT Jun 17, 2008
The number of people fleeing to other countries to escape conflict and persecution rose in 2007 for the second year as factors from climate change to overly scarce resources threatened to increase the flow, the United Nations refugee agency warned Tuesday.
Proposal for a new IMF role: SWF manager
Michael Bordo & Harold James (VoxEU) Jun 18, 2008
The IMF needs a new job. This column makes the case for the bold proposal that the IMF should manage a significant part of the new surplus countries’ sovereign wealth funds.
The coming population bust
Jeff Jacoby (Boston Globe) Jun 18, 2008
Thomas Malthus has been dead for 170 years, but the Malthusian fallacy - the dread conviction that the growth of human population leads to hunger, shortages, and a ravaged environment - is unfortunately alive and well.
Termites in the Trading System: How Preferential Agreements Undermine Free Trade
Jagdish Bhagwati (AEI) Jun 17, 2008
Bhagwati shines a critical light on preferential trade agreements, revealing how the rapid spread of PTAs endangers the world trading system.
Banks should be rewarded for transparency
Eric Knight (FT) Jun 18, 2008
Some of the largest banks appear to be running gigantic in-house 'hedge funds' alongside their core business. Better disclosure would ensure those with acceptable leverage do better in the stock market.
Nasty, brutish and short
Economist Jun 19, 2008
The life of a short-seller is a hard one—especially when markets turn sour and people look for someone to blame.
Globalized Inflation
Joachim Fels (WSJ) Jun 20, 2008
A hike in interest rates is supposed to staunch inflation, but weakened global finance markets erode any deflationary effects
Members Searching for Progress on Ag, NAMA
BRIDGES Weekly Trade News Digest - Vol. 12, Number 22 Jun 18, 2008
For the fourth summer in a row, WTO Members are in a push for progress in the Doha Round of trade talks in the run-up to the institution's August holiday.
Divisions over Disclosure and Parallelism Remain Unresolved at TRIPS Council Meeting
BRIDGES Weekly Trade News Digest - Vol. 12, Number 22 Jun 18, 2008
The first - and ultimately only - day of the meeting of the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement Council, originally scheduled for both Tuesday and Wednesday of this week, was characterised by traditional divisions on a handful of issues.
Asian macro policy is out of kilter
Barry Eichengreen (VoxEU) Jun 19, 2008
With the world on the brink of a recession and the US exporting inflation, Asian macro policies are seriously misaligned. Here one of the world’s leading international economists argues that Asia needs tight money, appreciated exchange rates, and fiscal stimulus.
A Leaderless Global Order
Muqtedar Khan (Globalist) Jun 19, 2008
Should regional players combine to give the United States a much-needed reprieve from global disorder?
Exploding commodity prices signal future inflation
Guillermo Calvo (VoxEU) Jun 20, 2008
Here, one of the world’s leading macroeconomists argues that the explosion of commodity prices is the result of a very real global financial storm associated with excess liquidity in several non-G7 countries and nourished by low G7 central banks’ interest rates. The commodity price explosion is a harbinger of future inflation.
Global: The Response of the Dove
Joachim Fels & Manoj Pradhan (MSDW) Jun 20, 2008
Central bankers have toned down their rhetoric in the past week, probably in order to contain rate hike expectations. This supports our view that markets have priced in too many rate hikes from major central banks this year, with the ECB the notable exception.
A Global AIDS Campaign Stalled
NYT Jun 21, 2008
President Bush should press for cooperation in an expeditious vote on a bill that would increase American funding to combat AIDS.
An Economist Who Matters
Kyle Wingfield (WSJ) Jun 21, 2008
The father of the euro says rescinding the Bush tax cuts would be 'devastating to the world economy.'
India's Growth Outstrips Crops
NYT Jun 22, 2008
India's supply of arable land is second only to that of the U.S., but it must buy some foods on international markets, exacerbating a global food crisis.
Ireland is wrong to put its miracle at risk
Wolfgang Münchau (FT) Jun 22, 2008
It could still use the single currency if it left the EU but this would be like Panama using the dollar – a little sad, really.
How the food crisis could solve the Doha round
Jagdish Bhagwati and Arvind Panagariya (FT) Jun 22, 2008
High prices will make the need for subsidies to US farmers, which vary inversely with market prices, negligible.
Day of the dollar: A global connection
LAT Jun 22, 2008
The weak U.S. currency is changing the lives of billions. Some are getting richer, some are barely making it. From a fish market in Tokyo to a sushi restaurant in Los Angeles, a look at why the greenback matters.
Why must our holiday euros cost so much?
Christopher Johnson (FT) Jun 22, 2008
Why are exchange rates so poor and charges so high for individuals who need cash when travelling in Europe or the US?
Our need to sustain the 'great moderation'
Stephen Cecchetti (FT) Jun 22, 2008
Financial innovation has led to greater growth and stability. While we need to tackle the present mess, the innovations should remain.
Why central banking is no longer boring
Guido Tabellini (VoxEU) Jun 23, 2008
The ECB and the Fed are pursuing very different policies on inflation fighting and the use of monetary aggregates in guiding policy. One of Italy’s leading economists argues that either the ECB or the Fed is making a mistake.
Currencies: Some EM Central Banks to Be Stress-Tested by Inflation
Stephen Jen (MSDW) Jun 23, 2008
Inflationary pressures of the type we are dealing with (triggered by energy and food price shocks) will pose a considerable challenge to monetary authorities, particularly those in EM economies experiencing a negative ToT shock. We believe that this is a powerful theme, which will hurt many EM currencies.
International Migration and the Global Agenda
Joseph Chamie (Globalist) Jun 23, 2008
What are the causes and effects of global migration?
Two goals, one instrument: How can central banks tackle financial crises?
Charles A.E. Goodhart (VoxEU) Jun 24, 2008
Central banks cannot achieve price and financial stability with one instrument (interest rates). A counter-cyclical regulatory system is needed to dampen asset booms and to smooth busting bubbles. To use such macro-prudential instruments effectively, regulators need courage, quantitative triggers, and independence; they will be criticised by lenders, borrowers and politicians in both booms and busts.
Watch Out for Sovereign Debt Risk
Carmen M. Reinhart & Kenneth Rogoff (WSJ) Jun 24, 2008
Argentina is already starting to default.
Spectre of inflation over global economy
FT Jun 24, 2008
The spectre of inflation returned to haunt the global economy as companies ranging from Dow Chemical of the US to South Korea's Posco unveiled sharp price rises to combat the soaring cost of energy and raw materials.
How to see world economy through two crises
Martin Wolf (FT) Jun 24, 2008
In the short term, the biggest monetary policy requirement is a tightening in emerging economies, many of which have strongly negative real interest rates. As important is letting jumps in energy prices pass through, forcing adjustments in energy use.
Central bank independence: failures, successes and the “seesaw effect”
Daron Acemoglu, Simon Johnson, Pablo Querubín & James A Robinson (VoxEU) Jun 25, 2008
Central bank independence can have marvellous effects on inflation, but not always. This column reviews evidence of a U-shaped interaction between policy reform and general political institutions; independence can be undermined in nations with poor political institutions, while it is less necessary in nations with excellent institutions. A ‘seesaw’ effect is also identified whereby fiscal policy deteriorates following central bank independence.
Strange financial physics of the inverse bubble
John Kay (FT) Jun 24, 2008
Bubbles are puffed up, not puffed down. That is why we need a phrase to describe the anti-bubble.
Let's get one thing straight: The Federal Reserve isn't going to raise interest rates to back a ``strong dollar'' policy.
Lamy Calls for Mini-Ministerial from 21 July
BRIDGES Weekly Trade News Digest Vol. 12, Number 23 Jun 25, 2008
Ministers from key trading nations appear set to gather in Geneva from 21 July in an attempt to reach a deal in the troubled Doha Round of global trade talks, which face an additional multi-year delay if an accord is not salvaged soon.
G-20 Calls for Greater Ambition in Farm Talks
BRIDGES Weekly Trade News Digest Vol. 12, Number 23 Jun 25, 2008
A group of agriculture-exporting developing countries, the G-20, issued a statement earlier this week calling for greater ambition in ongoing agricultural talks, and a better balance of issues between the farm negotiations and those on industrial goods.
The Reign of Thuggery
Joshua Hammer (NYRB) Jun 26, 2008
On a clear spring afternoon in Harare in mid-May, South Africa's president, Thabo Mbeki, paid a call on Robert Mugabe, Zimbabwe's beleaguered dictator, six weeks after Zimbabwe's tumultuous elections on March 29 in which opposition leader Morgan Tsvangirai claimed a clear victory over Mugabe. Mbeki had been largely silent as Zimbabwe descended into chaos.
Global: The Double-Digit Inflation Club
Joachim Fels & Manoj Pradhan (MSDW) Jun 26, 2008
There is reason to worry about the continuation of the economic success story in EM countries that have high inflation, are unable or unwilling to tighten policy sufficiently, and are commodity consumers rather than producers.
Hot money in China
Economist Jun 26, 2008
The largest wave of speculative cash ever in an emerging economy is hitting China.
Interconnected We Prosper
William J. Amelio (IHT/YaleGlobal) Jun 27, 2008
A larger middle class, with all its innovations, should be celebrated.
Dollar's decline a plus for international debt
Washington Times Jun 28, 2008
Increases impact of U.S. investments in foreign stocks
Tiny Voices Defy Child Marriage in Yemen
NYT Jun 28, 2008
Two girls' stories have helped spur a movement to put an end to child marriage, which is increasingly seen as a crucial part of the cycle of poverty in Yemen.
Coburn of Africa
WSJ Jun 28, 2008
The hero of the AIDS funding debate.
Regulators need to shed light on derivatives
John Coffee (FT) Jun 29, 2008
Usually the leader, the Securities and Exchange Commission has fallen out of step with the growing consensus over disclosure of equity swaps.
G8 leaders ready to backtrack on Africa aid
FT Jun 29, 2008
Leaders of the Group of Eight rich nations are set to backtrack on their landmark pledge at the Gleneagles summit in 2005 to increase development aid to Africa to $25bn a year.
Fixing the global food crisis
Arvind Subramanian (VoxEU) Jun 30, 2008
Food riots, starvation, malnutrition, and supply-driven inflation – the global food crisis is upon us. Here one of the world’s leading development economists discusses short-, medium-, and long-run solutions.
Currencies: High Transport Costs to ‘Un-Flatten’ the World
Stephen Jen & Luca Bindelli (MSDW) Jun 30, 2008
We believe that, with rising transport costs, trade globalisation may slow significantly. The near-term impact is unlikely to be positive for Asia; however, in the long run, this shock could coerce Asia into moving away from the export-led growth model.
Trade has saved America from recession
Fred Bergsten (FT) Jun 30, 2008
Presidential candidates must see the folly of backing away from global trade when it is providing critical gains for the US.