News & Commentary:

July 2008 Archives


Agribusiness vs. food security: The food crisis and the IFIs
Bretton Woods Update No. 61 Jun/Jul 2008
Plus: IMF challenged on accountability, governance; IMF structural conditionality here to stay; Asian Monetary Fund on the cards?; Rethinking the World Bank role in conflict states; and more.

Saving Resources to Save Growth
Jeffrey D. Sachs (Project Syndicate) Jul 2008
Reconciling global economic growth, especially in developing countries, with the intensifying constraints on global supplies of energy, food, land, and water is the great question of our time. Commodity prices are soaring worldwide, not only for headline items like food and energy, but for metals, arable land, fresh water, and other crucial inputs to growth, because increased demand is pushing up against limited global supplies. Worldwide economic growth is already slowing under the pressures of $135-per-barrel oil and grain prices that have more than doubled in the past year.

The Fight for Food
Marc van Ameringen (Project Syndicate) Jul 2008
Every year, 3.5 million mothers and children below the age of five die in poor countries because they do not have the nutrition they need to fight common diseases. Three-quarters of them could have survived diarrhea or malaria if they had been properly nourished.

Barbarians or Geniuses at the Gate?
Hans-Werner Sinn (Project Syndicate) Jul 2008
Europe is currently experiencing a huge wave of migration between its east and west. This movement resembles the Great Migrations (Völkerwanderung) that marked Europe between the fourth to sixth centuries.

Europe Should Step Up By Standing Down
Jim O'Neill (Project Syndicate) Jul 2008
Ten years on, the euro is a resounding success. A financial-market heavyweight, it now outperforms the dollar, the yen, and, until recently, the mighty Chinese yuan, while euro-denominated bond trading rivals the US market in size.

Doing Good Efficiently
Finn E. Kydland (Project Syndicate) Jul 2008
Policymakers can concoct many excuses not to invest in global aid and development projects. Three weeks ago, I joined a group of five Nobel laureates and three distinguished economists to undermine one of those excuses, by providing information about where money can achieve the most good.

The World's Runaway Train
Kenneth Rogoff (Project Syndicate) Jul 2008
The global economy is a runaway train that is slowing, but not quickly enough. That is what the extraordinary run-up in prices for oil, metals, and food is screaming at us. The spectacular and historic global economic boom of the past six years is about to hit a wall. Unfortunately, no one, certainly not in Asia or the United States, seems willing to bite the bullet and help engineer the necessary coordinated retreat to sustained sub-trend growth, which is necessary so that new commodity supplies and alternatives can catch up.

The End of Neo-liberalism?
Joseph E. Stiglitz (Project Syndicate) Jul 2008
The world has not been kind to neo-liberalism, that grab-bag of ideas based on the fundamentalist notion that markets are self-correcting, allocate resources efficiently, and serve the public interest well. It was this market fundamentalism that underlay Thatcherism, Reaganomics, and the so-called “Washington Consensus” in favor of privatization, liberalization, and independent central banks focusing single-mindedly on inflation.

The Death of the Globalization Consensus
Dani Rodrik (Project Syndicate) Jul 2008
The world economy has seen globalization collapse once already. The gold standard era – with its free capital mobility and open trade – came to an abrupt end in 1914 and could not be resuscitated after World War I. Are we about to witness a similar global economic breakdown?

What is the Dollar’s Sustainable Value? Recommended!
Martin Feldstein (Project Syndicate) Jul 2008
How much further will the dollar fall? Or has it already fallen so far that it will now start to move back to a higher level?

Where Are the Global Leaders?
Jeffrey D. Sachs (Project Syndicate) Jul 2008
The G-8 Summit in Japan earlier this month was a painful demonstration of the pitiful state of global cooperation. The world is in deepening crisis. Food prices are soaring. Oil prices are at historic highs. The leading economies are entering a recession. Climate change negotiations are going around in circles. Aid to the poorest countries is stagnant, despite years of promised increases. And yet in this gathering storm it was hard to find a single real accomplishment by the world’s leaders.

Commodity Price Spiral Taking Toll on African Economies
IMF Survey Jul 1, 2008
Many African countries are among the hardest-hit by the world food and fuel price crisis. High food prices in particular tend to hit the poor the hardest and thus put at risk progress on poverty reduction, social cohesion, and the broader development agenda.

The WTO tipping point
Richard Baldwin (VoxEU) Jul 1, 2008
The World Trade Organisation is losing its place at the centre of the global trading system. Absent reforms, the rules-based architecture of international trade may collapse into a “might makes right” affair.

Price Surge Driving Some Countries Close to Tipping Point-IMF
IMF Survey Jul 1, 2008
The impact of surging oil and food prices is being felt globally but is most acute for import-dependent poor and middle-income countries confronted by balance of payments problems, higher inflation, and worsening poverty, a new IMF study warns.

Lessons to be learnt from the financial crisis
Martin Wolf (FT) Jul 1, 2008
The aim of this year's report by the Bank for International Settlements is clear: it is to reduce the frequency and severity of crises. It is not enough to say that we can clear up afterwards. That is too complacent and too one-sided.

Economic spillovers from international environmental cooperation
Andrew K. Rose & Mark M. Spiegel (VoxEU) Jul 2, 2008
Prospects for international environmental cooperation often seem dim, as agreement must hew to the lowest common denominator. This column identifies economic gains from environmental commitments via reputational spillovers and their impact on capital flows. The evidence suggests that nations have more to gain from cooperation than they may realise.

Progress over Next Two Weeks Critical to Ministerial's Prospects
BRIDGES Weekly Trade News Digest Vol. 12, Number 24 Jul 2, 2008
WTO Director-General Pascal Lamy rolled the dice last week, summoning ministers to Geneva later this month in a risky bid to salvage a deal in the troubled Doha Round of trade talks.

After 3-Year Hiatus, WIPO Patents Standing Committee Launches New Programme of Work
BRIDGES Weekly Trade News Digest Vol. 12, Number 24 Jul 2, 2008
The WIPO Standing Committee on the Law of Patents (SCP), under the chair of Maximiliano Santa Cruz (Chile), met from 23-26 June to discuss how the SCP should continue its work. The meeting, which followed a three-year break in the talks, occurred amidst much speculation about the fate of the negotiations on the Substantive Patent Law Treaty (SPLT).

High Food Prices Create Opportunity for Subsidy Reform, Report Says
BRIDGES Weekly Trade News Digest Vol. 12, Number 24 Jul 2, 2008
Developed countries should take advantage of the current spike in commodity prices to reduce their agricultural subsidies, according to a report issued last week by the Organisation for Economic Cooperation and Development (OECD).

World Bank pressures G-8 on oil and food
IHT Jul 2, 2008
The president of the World Bank is calling on leaders meeting in the Group of 8 economic summit next week to make new aid commitments to a dozens of countries.

China and cheap imports: Champions of equality
Christian Broda (VoxEU) Jul 3, 2008
Conventional wisdom says globalisation has increased US income inequality. This column says that is dead wrong, as China and Wal-Mart have increased the purchasing power of the poor more than the rich.

Global Action to Save Global Growth
Ban Ki-moon (WP) Jul 3, 2008
Global growth is the leitmotif of our era. The great economic expansion, now in its fifth decade, has raised living standards worldwide and lifted billions out of poverty.

Don’t blame the speculators Recommended!
Economist Jul 3, 2008
Politicians who try to make oil cheaper by restraining speculation will just make things worse

Wrestling for influence
Economist Jul 3, 2008
The post-war global institutions have largely worked well. But rising countries and growing threats are challenging their pre-eminence

U.S. Is in No Shape to Give Advice, Medvedev Says
NYT Jul 3, 2008
Russia's president said that America was in "essentially a depression," and that Russia had a right to a larger role in the world economy.

Revolution of urban rebels
Edward L. Glaeser (Boston Globe) Jul 4, 2008
The Fourth of July is an opportunity to reflect on the long, difficult path to liberty. The organized uprisings, like t he American Revolution, that toppled tyrants were often urban affairs that started with surreptitious meetings in crowded pubs and guildhalls. They were led by creatures of the city: merchants, lawyers, weavers, butchers, and brewers. As we celebrate our freedom at spacious suburban barbecues, we should remember that the road to freedom started on far more crowded city streets.

Global: The Transatlantic Inflation Puzzle
Joachim Fels & Elga Bartsch (MSDW) Jul 4, 2008
More flexible labour and product markets in the US may help the Fed to contain inflation, whereas the ECB is facing an uphill struggle due to many rigidities. Thus, the Fed’s and the ECB’s divergent policy paths may be justified and could last for longer, yet produce a roughly similar outcome for inflation.

Currencies: Dollar Smiling Against EM, Still Frowning Against EUR
Stephen Jen (MSDW) Jul 4, 2008
We still expect the dollar’s ascent to be hesitant and asynchronous. The dollar has begun, and will likely continue, to reassert itself against most EM currencies. While it may remain somewhat vulnerable against the EUR near term, we still believe it is grossly under-valued and should perform better over the longer term against the majors.

Currencies: AXJ: The Energy Shock to Asia
Stephen Jen & Luca Bindelli (MSDW) Jul 4, 2008
We believe that energy price increases will be a ‘game-changer’ for Asia. While there is some scope for remedial policy action to ‘amortise’ this shock, AXJ currencies will likely weaken against the dollar and assets should underperform in the period ahead.

Natural clusters: Policies promoting agglomeration are unnecessary Recommended!
Philippe Martin, Thierry Mayer & Florian Mayneris (VoxEU) Jul 4, 2008
Governments spend heavily on industrial clusters. They are wasting their money if firms naturally cluster to reap agglomeration gains. This column presents evidence from France that questions policymakers’ enthusiasm for promoting clusters.

Fading Reciprocity: Challenges to Global Rules
Rolf Langhammer (VoxEU) Jul 5, 2008
Multilateral trade talks are stagnating while bilateral agreements being signed daily. This column considers why reciprocity seems to have lost its appeal.

Man-Made Hunger
NYT Jul 6, 2008
The heads of state of the Group of 8 industrial nations must accept their share of responsibility for the food crisis and lay out clear plans to address it.

Recession is not the worst possible outcome
Wolfgang Münchau (FT) Jul 6, 2008
We might want to question whether the recipes that got us into the current financial mess are also most suited to get us out again.

All eyes on the carry trade
Economist Jul 6, 2008
When to the yen?

Is Africa recovering?
Economist Jul 7, 2008
The World Bank's latest report on the political state of Africa

Aid and AIDS: A delicate cocktail
Mieke Reuser & Hendrik P. van Dalen (VoxEU) Jul 7, 2008
Development assistance targeting health overwhelmingly concentrates on HIV/AIDS. This column argues that that focus neglects critical demographic issues and degrades health infrastructure, particularly in Sub-Saharan Africa. The prime rule for AIDS aid should be “First, do no harm”.

World's Poor Hunger for Free Trade
Kevin Hassett (Bloomberg) Jul 7, 2008
This week, as the Group of Eight countries meet to discuss global problems, there is one sad truth you can put your money on: The G-8 will continue to fiddle while the developing world burns.

Hot Money Headache
Lawrence J. Brainard (WSJ) Jul 7, 2008
Tighter capital controls cannot solve China's monetary problems.

Microfinance, Big Impact
Syed Kamall (WSJ) Jul 7, 2008
No poor country ever got rich on a G-8 aid package.

The Rich World and the Food Crisis
Adam Lerrick (WSJ) Jul 8, 2008
Blame subsidies, not speculators, for rising prices.

Why obstacles to a deal on climate are mountainous
Martin Wolf (FT) Jul 8, 2008
Tackling man-made climate change is much the most complex collective action problem in human history. Solving it will require concerted efforts from both developed and developing countries over at least a century. There is no choice but to try.

Chinese exports and Chinese subsidies: firm-level evidence
Sourafel Girma, Yundan Gong, Holger Görg & Zhihong Yu (VoxEU) Jul 8, 2008
China has largely reduced the scope of its production and innovation subsidies at the firm level, but some still remain. Recent research shows that such production subsidies do, on average, boost firm-level exports especially in more innovative and capital-intensive industries and especially for firms with previous export experience.

Time to lose the dollar peg: Gulf States
Jeffrey Frankel (VoxEU) Jul 9, 2008
The Gulf States’ dollar peg is causing them harm. One of the world’s leading international macroeconomists argues that they should “peg the export price” as this delivers automatic accommodation to terms of trade shocks while retaining the credibility-enhancing advantages of a nominal anchor.

Grappling with Globalization
Steven Greenhouse (Globalist) Jul 8, 2008
What things should the U.S. compete for — and what things are more efficient abroad?

Norway's Oil Fund Shows the Way for Wealth Funds
IMF Survey Jul 9, 2008
The Norwegian Oil Fund is often cited as an exemplary sovereign wealth fund (SWF), which uniquely positions it as a model for and potentially important contributor to the new set of voluntary principles for state investment institutions.

Chair of WTO Ag Talks Says New Draft Text Will Simplify Options for Ministers
BRIDGES Weekly Trade News Digest - Vol. 12, Number 25 Jul 9, 2008
A new draft text due later this week will simplify options in key areas in order to help ministers take decisions when they meet in Geneva later this month, the chair of the WTO agriculture talks has told Members.

Slow Progress on Industrial Goods Talks in Final Push to Ministerial
BRIDGES Weekly Trade News Digest - Vol. 12, Number 25 Jul 9, 2008
Despite the glacial rate of progress in the troubled Doha Round talks on liberalising trade in manufactured goods, the chair of the WTO negotiating committee told Members on Tuesday that he would issue an updated draft deal later this week, most likely late in the day on 10 July.

The China bubble fuelling record oil prices
Daniel Gros (FT) Jul 9, 2008
The expectation that prices can only go up is the real culprit, not the trading among speculators who are simply betting against each other.

Better a Mandelson than trade subsidies
Geoffrey Wheatcroft (FT) Jul 9, 2008
Today he is a force for good. It is stupid and offensive to say that the commissioner's trade liberalisation policies were to blame for that Irish vote.

When Commodities Revolt
Llewellyn King (Globalist) Jul 10, 2008
How are increasing commodity prices challenging economic policies around the world?

Where Is the World Headed?
Immanuel Wallerstein (YaleGlobal) Jul 10, 2008
A multipolar world must prepare for a relative decline in US power and the turbulence that may follow

The Global Food Fight
Moisés Naím (Foreign Policy) Jul 10, 2008
Blame farm subsidies and other shortsighted government policies for high food prices.

The only way is down
Economist Jul 10, 2008
The high priest of “peak oil” thinks world oil output can now only decline.

Global: Emerging Inflation?
Manoj Pradhan (MSDW) Jul 11, 2008
Emerging market growth is in danger as inflation threatens to undermine consumer spending. Our colleagues expect inflation to ease towards the end of the year, but slowly and with upside risks, and the commitment of central banks to fight inflation seems to vary according to the growth outlook.

Why we can’t trust rating agencies
Beatriz Mariano (VoxEU) Jul 12, 2008
Rating agencies are currently plagued by conflicts of interest in building and rating financial products. But even with the right incentives, reliable ratings would be hard to come by, this column argues. If market participants punish wrongly optimistic predictions more than wrongly pessimistic ratings, then an agency’s good reputation and a good rating do not coincide.

The procyclical effects of Basel II
Rafael Repullo & Javier Suarez (VoxEU) Jul 14, 2008
Basel II’s goal was to reduce incentives for excessive risk taking. Making banks’ capital requirements risk-sensitive, however, also set the system up for credit crunches during economic down turns. This column argues that small cyclical adjustments to the confidence levels set by regulator could preserve Basel II’s value-at-risk foundation while avoiding painful credit crunches during periods of economic distress.

Currencies: The Path of Energy Conservation
Stephen Jen & Luca Bindelli (MSDW) Jul 14, 2008
Examining the levels of energy efficiency of various countries, and controlling for income level, we find several interesting features of the world’s energy use.

Currencies: A Nuanced Inflation Shock to Emerging Economies
Stephen Jen & Luca Bindelli (MSDW) Jul 14, 2008
For some EM economies, the long-run relationship between inflation and growth could be positive, justifying central banks protecting growth and allowing inflation to rise. Investors should be aware of the risk of EM central banks having a moratorium on inflation-targeting.

Crisis and coherence: finance remains vulnerable
Mohamed El-Erian (FT) Jul 14, 2008
The jury is still out over whether all the ad hoc crisis management steps evolve into a coherent and sustainable policy outcome.

Common Wealth
Jeffrey D. Sachs (Globalist) Jul 14, 2008
The 20th century saw the end of European dominance of global politics and economics. As Jeffrey D. Sachs argues in his book, “Common Wealth,” the 21st century will be marked by a shift from acting in national interests to acting in global interests — especially as the two become more dependent on each other.

How did the euro boost trade? Microeconomic evidence
Volker Nitsch & Mauro Pisu (VoxEU) Jul 15, 2008
The euro has increased trade within the currency union. This column summarises research exploring how firms’ exporting behaviours have been shaped by the euro.

A year of living dangerously for the world
Martin Wolf (FT) Jul 15, 2008
It is almost a year since the US subprime crisis went global.The hope that the repricing of risk would be no more than a brief interruption has been disappointed. So where is the world economy now?

Boom time for the global bourgeoisie
Jim O'Neill (FT) Jul 15, 2008
Commentators often depict a shrinking middle class, with rising financial inequality. But, globally, this is simply not true.

A Baffling Global Economy
Robert J. Samuelson (WP) Jul 16, 2008
We've been having the wrong discussion about globalization. For years, we've argued over whether this or that industry and its workers might suffer from imports and whether the social costs were worth the economic gains from foreign products, technologies and investments. By and large, the answer has been yes. But the harder questions, I think, lie elsewhere. Is an increasingly interconnected world economy basically stable? Or does it generate periodic crises that harm everyone and spawn international conflict?

Sovereign funds cut exposure to weak dollar
FT Jul 16, 2008
Some of the world's largest sovereign wealth funds are seeking to scale back their exposure to the US dollar in a sign of global concern about the currency.

North-South Coalition Sets Out 'Draft Modalities' on TRIPs
BRIDGES Weekly Trade News Digest - Vol. 12, Number 26 Jul 16, 2008
An unprecedented coalition of developed and developing countries has crafted a set of 'draft modalities' on three controversial intellectual property issues: the disclosure of the source of genetic information in patent applications, the extension of geographical indications (GIs) to all goods, and the establishment of a multilateral register for GIs for wines and spirits.

Negotiators Divided Over Whether New Ag Text Could Spark Doha Deal
BRIDGES Weekly Trade News Digest - Vol. 12, Number 26 Jul 16, 2008
Trade delegates awaiting the arrival of ministers in Geneva next week expressed both optimism and pessimism about whether a deal could be struck on the basis of a 10 July text circulated by the chair of the WTO agriculture negotiations. While some reported that it should be possible to reach an accord, others warned of numerous areas of continued disagreement that threatened to derail the high-level talks.

Chair Says NAMA Deal is 'Doable', Though Divisions Remain
BRIDGES Weekly Trade News Digest - Vol. 12, Number 26 Jul 16, 2008
Trade ministers meeting in Geneva next week will still have to resolve wide differences if they are to strike a framework deal on cutting manufacturing tariffs, after a new draft compromise text by the chair of the WTO negotiating committee left potential provisions on some central issues largely unchanged from an earlier version.

Global stocks close higher
IHT Jul 16, 2008
U.S. stocks jumped more than 2 percent Wednesday after strong results at Wells Fargo fueled a powerful rally in the battered banking sector and an unexpected leap in U.S. crude supplies led oil prices to fally sharply.

Who's Gaining from a Weak Dollar?
Rebecca Ruiz (Forbes) Jul 16, 2008
Where, and how, foreign tourists are spending their money in the U.S.

Reviving the WTO: Doha’s woes and structural challenges
Bruce Blonigen (VoxEU) Jul 17, 2008
The Doha Round is stagnant, which does not bode well for trade liberalisation in the near future and possibly for the World Trade Organization in the long run. This column highlights the lessons of a new report on reviving the Doha Round, emphasising long-term trends that must be addressed, lest the WTO become obsolete.

Short-run ignorance, long-run prescience: Forecasting exchange rates
Agnès Bénassy-Quéré, Sophie Béreau & Valérie Mignon (VoxEU) Jul 17, 2008
Economists’ best guess for the dollar’s value tomorrow is its value today, but they predict exchange rates a decade into the future. This column explains the difference between short-run and long-run exchange rate forecasts and examines the future of the euro-dollar rate.

Slowing Economy Gives Way to Global Role Reversals
Anthony Faiola & Jill Drew (WP) Jul 17, 2008
The global slowdown stemming in part from the deepening U.S. financial crisis is hitting the world's richest nations the hardest even as emerging nations, some with once-fragile economies, are proving relatively resilient.

Doha's last chance?
Economist Jul 17, 2008
The current deal is not great, but better than nothing.

IMF warns emerging markets on inflation
FT Jul 17, 2008
Emerging economies must make the fight against inflation their 'top priority', the fund said, as it sharply raised its forecast for price increases in the developing world.

In financial desert, a veritable oasis
IHT Jul 17, 2008
Bathed in the glow of the skyline's glitter, the centerpiece of Dubai's financial hub seems equal to the thrusting ambitions of the foreign investment bankers rushing to set up shop here.

A 5-step program for Doha rehabilitation
Jeffrey J. Schott (VoxEU) Jul 18, 2008
WTO ministers gather next week to push for a conclusion of the WTO talks that were started in Doha in 2001. This column argues that there is zero chance of a deal in 2008, but proposes a 5-step plan could put the talks on a glide path to a successful landing in 2009 or 2010.

Can world trade talks keep pace with global change?
IHT Jul 18, 2008
With economic power distributed more equally around the globe than ever before, world trade negotiations have become as cumbersome as they are slow.

Doha deal would aid many European farmers
Patrick Messerlin (FT) Jul 20, 2008
Tariff cuts on processed food would particularly assist French exporters benefiting from the country's gastronomic reputation.

Wyplosz on the Summers vs Buiter bailout debate
Charles Wyplosz (VoxEU) Jul 20, 2008
Should taxpayers bail out the banking system? One of the world’s leading international macroeconomists contrasts the Larry Summers “don’t-scare-off-the-investors” pro-bailout view with the Willem Buiter “they-ran-into-a wall-with-eyes-wide-open” anti-bailout view. He concludes that either way, taxpayers are always the losers. The best policy makers can do is to be merciless with shareholders and gentle with bank customers.

Cultural proximity and trade: Evidence from Eurovision
Gabriel Felbermayr & Farid Toubal (VoxEU) Jul 20, 2008
This column introduces the use of Eurovision song contest scores as a measure of cultural proximity. Unlike other measures, such as common language or religion, Eurovision scores are asymmetric and time-varying, allowing estimates to distinguish between two potential channels through which cultural proximity might affect trade: trade costs and consumer preferences.

Doha's F-Words
WSJ Jul 21, 2008
A global trade deal is more than a short-term fix for the finance, food and fuel crises.

How Free Is Free Trade?: Bhagwati's 'Termites in the Trading System'
Douglas A. Irwin (NY Sun) Jul 21, 2008
Jagdish Bhagwati is one of the world's most distinguished economists. Currently a university professor at Columbia, Mr. Bhagwati is a rare academic who has the great ability to communicate his ideas to a more general audience. In works such as his recent book, "In Defense of Globalization," Mr. Bhagwati has become famous as a persuasive and articulate proponent of expanding world trade to help improve the lot of the poor. In "Termites in the Trading System," Mr. Bhagwati argues that not all trade deserves our equal support, however, and mounts a brisk and spirited attack on preferential, so-called "free trade" agreements that are, in his view, leading the world trading system astray.

Currencies: Ranking the Top Commodity Exporters
Stephen Jen & Luca Bindelli (MSDW) Jul 21, 2008
We rank commodity exporters in this note. The GCC currencies are likely to follow in the footsteps of the CNY. Short-term, AUD and NZD are likely to descend only gradually, and the medium-term outlook for AUD and CAD appears quite positive. Hit by the energy shock, JPY and KRW should not strengthen.

EU to slash farm tariffs to help global trade talks
IHT Jul 21, 2008
The EU began global trade talks by saying that it could reduce farm tariffs by 60 per cent in a challenge to developing countries to make reciprocal concessions.

Food price inflation: Biofuels, speculators or emerging market demand?
Stefan Tangermann (VoxEU) Jul 22, 2008
New research shows that India, China, and speculators are not the culprits in the food price explosion. Biofuels were a significant element in the 2005-2007 food price surge as they accounted for 60% of the growth in global consumption of cereals and vegetable oils. Since new research also shows that biofuel support policies are disappointingly ineffective on environmental grounds, governments should reconsider them.

Global trade a tough issue for Obama and McCain
IHT Jul 22, 2008
The candidates are struggling to balance economic and political realities: projecting confidence about America's future in a global economy while conveying concern for people whose jobs have disappeared.

China's Rumble With Globalization - Part I
Xu Sitao (YaleGlobal) Jul 22, 2008
Price controls do not insulate China from global economic problems and inflationary pressure.

Cherished myths fall victim to economic reality Recommended!
Paul De Grauwe (FT) Jul 22, 2008
There is a danger that the macro¬economic models now in use in central banks operate like a Maginot line. They have been constructed in the past as part of the war against inflation. They do not provide banks with the right tools to be successful.

China's currency needs to rise further
Morris Goldstein and Nicholas Lardy (FT) Jul 22, 2008
It will be hard to achieve more consumption-driven growth as long as household income continues to decline.

Will the dollar lose its throne? Economic fundamentals vs network effects
Marc Flandreau (VoxEU) Jul 23, 2008
Will the dollar lose its place as the premier international currency? This column argues that the previous episode of dethroning, in which the dollar overtook the pound, suggests that economic fundamentals, rather than network externalities, drive the choice of a great global currency. Occasionally, it takes an economic historian to remind his economist colleagues that history may not matter as much as one would want to believe.

A global agency is needed for the energy crisis
Mohamed ElBaradei (FT) Jul 23, 2008
The need for joint action to develop long-term solutions to our energy problems is now undeniable.

Global stocks rise as oil falls
IHT/Bloomberg Jul 23, 2008
Most U.S. stocks climbed for a second day as oil's retreat boosted retailers and reports from AT&T to Yahoo bolstered expectations that earnings will weather an economic slowdown.

Why large American gains from globalisation are plausible
Matthew Adler & Gary Clyde Hufbauer (VoxEU) Jul 24, 2008
A popular headline figure quantifying the US payoff from globalisation at $1 trillion per year has been criticised by Dani Rodrik and other sceptics. Here is an explanation and defence of the Peterson Institute’s big number.

A time for pruning
Economist Jul 24, 2008
Signs that the hedge-fund industry is growing more slowly

Economist Jul 24, 2008
Burgernomics says currencies are very dear in Europe but very cheap in Asia.

WTO and Kyoto: Some Negotiating Similarities – And Some Differences
Tim Grosner (Globalist) Jul 25, 2008
Why are the stakes so high when it comes to the WTO and Kyoto negotiations?

World must look to Europe as capitalisms clash
John Thornhill (FT) Jul 24, 2008
The Continent could play a big role in shaping the new economic order if it could only marshal its forces effectively. The 27-member EU is now the world's biggest economy thanks to enlargement and the euro's strength.

China's Rumble With Globalization - Part II
Jonathan Fenby (YaleGlobal) Jul 24, 2008
The nation cannot build a wall against the challenges facing the rest of the globe.

It is time to embrace freer trade with China
Jack Ma (FT) Jul 24, 2008
China's role as top supplier, and now a leading buyer, is causing a new economic phenomenon that should be embraced rather than feared.

Particularly Bad Timing
NYT Jul 25, 2008
Unfortunately, the world's leading trading nations seem ready to abandon the World Trade Organization's effort to reduce some of the world's obstacles to trade.

Global: Global Forecast Risks: From Inflation Upside to Growth Downside
Richard Berner (MSDW) Jul 25, 2008
Market concerns have shifted from upside risks to global inflation to downside risks to global growth. The two are linked: Inflation risks are still high and will likely undermine growth through policy tightening and weaker markets.

Should trade multilateralists fear regionalism?
Antoni Estevadeordal, Caroline Freund & Emanuel Ornelas (VoxEU) Jul 25, 2008
Multilateral liberalisation is moving at a glacier pace while regionalism spreads like wildfire. Recent research suggests that at least in Latin America, regional tariff cutting induced a faster decline in external tariffs, but regionalism is more helpful precisely in the sectors where the multilateral system works best.

IMF Helping Countries on Health, Social Spending Policies
IMF Survey Jul 25, 2008
As nations around the world grapple with the impact of high food and energy prices, the IMF is working with low-income countries to protect spending on health, education, and other services while addressing the inflation and balance of payments repercussions.

How can we end poverty? The determinants of development
Raphael Auer (VoxEU) Jul 26, 2008
Why are some economies rich and others poor? The economics profession is divided between rival schools of thought that emphasise geography or institutions. This column assesses the relative importance of each using the interaction of history and geography. The answer raises major policy implications.

Educational inequality persistence: Evidence from 29 nations over 50 years
Tom Hertz, Tamara Jayasundera, Patrizio Piraino, Sibel Selcuk, Nicole Smith & Alina Verashchagina Jul 26, 2008
Across the globe, children of well-off parents are generally well off; the offspring of the downtrodden are usually downtrodden. But why? This column marshals new empirical evidence on the persistence of educational attainment and its role in intergenerational transmission of social economic status.

Global sourcing: Evidence from French firms
Fabrice Defever & Farid Toubal (VoxEU) Jul 26, 2008
Outsourcing has been much discussed in terms of its impacts on employment and growth. But how, why, and where do firms outsource parts of their production? This column presents empirical evidence that tests theoretical models of global sourcing

How Free Trade Can Help Solve the Energy Crisis
Robert McFarlane & George Philippidis (WSJ) Jul 26, 2008
The unprecedented escalation in oil and food prices is a clear and present danger to our economy and national security. The root cause of this crisis is our dependence on a single commodity, oil, for transportation -- we burn 145 billion gallons of gasoline a year. The only permanent solution is diversity in our fuel supply to ensure competition and choice in the marketplace.

Dollar Bulls Might Just Meet Godot This Time
Michael R. Sesit (Bloomberg) Jul 28, 2008
The long vigil in expectation of a dollar rebound during the past few years at times resembled ``Waiting for Godot,'' Samuel Beckett's 1953 play about the futility, despair and frustrations of a couple of tramps who spend two days waiting for a man who never shows up.

The SEC's Naked Logic
L. Gordon Crovitz (WSJ) Jul 28, 2008
Sometimes short sellers are right.

Currencies: Winners and Losers from Terms-of-Trade Shocks
Stephen Jen & Luca Bindelli (MSDW) Jul 28, 2008
Energy and other commodity price changes lead to large positive and negative terms-of-trade (ToT) shocks around the world. We believe that Japan and Korea should see their currencies weaken, given that they have suffered the largest negative ToT shocks.

IMF sees no end in sight to credit crisis
FT Jul 28, 2008
Global financial markets are 'fragile' and indicators of systemic risk remain 'elevated' almost a year into the credit crisis, the International Monetary Fund said.

Doha trade talks stall over farm imports
FT Jul 29, 2008
Heated public disagreements broke out in the so-called Doha round of trade talks, as negotiators fought to maintain the unexpected momentum gained over the weekend.

Pegging the export price
VoxEU Jul 29, 2008
This column introduces Jeffrey Frankel’s Policy Insight No. 25 explaining his proposal for countries to peg their currencies to their export prices. Such a peg adjusts to trade shocks and serves as a nominal anchor, so it may outperform current exchange rate regimes.

Fuel subsidies for some make oil more expensive for all
IHT Jul 28, 2008
To understand why fuel prices around the world have soared over the last year, it helps to get an idea of how foreign governments are subsidizing energy prices at home.

Balance of power shifts to China at global trade talks
IHT Jul 28, 2008
As seven years of global trade talks approach another nervy climax, China is emerging as a central player - and coming under heavy criticism from the United States and others for its tough tactics.

How to arrive at fair value during a crisis
Jean-François Lepetit, Etienne Boris & Didier Marteau (FT) Jul 28, 2008
If accounting exaggerates peaks and troughs of the business cycle, it contradicts its aim.

Obamanomics Is a Recipe for Recession
Michael J. Boskin (WSJ) Jul 29, 2008
Mixing tax hikes and trade protectionism could send the economy into a tailspin.

Why does gasoline cost so much? Recommended!
Lutz Kilian (VoxEU) Jul 29, 2008
Gas prices are a product of supply and demand. This column attributes recent gas price increases to stagnant oil supplies and growing global demand from emerging Asian economies – not speculators. Additional shocks to the US refining capacity further tightened gas prices in the US. These forces will likely keep gas prices high for the foreseeable future.

The WTO failure in light of the GATT’s history
Douglas Irwin & Petros C. Mavroidis (VoxEU) Jul 29, 2008
The WTO's Doha Round talks failed. This column draws lessons from a new book on the history of the WTO's predecessor, the GATT, to show that building and maintaining the global trading system has never been easy. The key ingredient is political leadership, which is evidently lacking at this stage.

Chronology of a U.S. bank failure
IHT Jul 29, 2008
Executives at IndyMac, like many people on both Wall Street and Main Street, apparently never dreamed that home prices might fall.

Brazil finally poised to step up as global economic player
IHT Jul 29, 2008
Despite investor fears about the leftist bent of its president, the country is riding its biggest economic expansion in three decades.

The world cannot grow its way out of this slowdown
Kenneth Rogoff (FT) Jul 29, 2008
It is surprising how many policymakers and pundits believe economic policy should aim to keep pushing demand up. If all regions attempt to stimulate demand, there will be higher commodity prices and ultimately a bigger crash in the not-too-distant future.

After 7 Years, Talks on Trade Collapse
NYT Jul 30, 2008
After years of on-again, off-again negotiations, world trade talks collapsed in rancor, ending hopes of a deal to open markets and cut farm subsidies.

Greasing the World Economy Without Doha Recommended!
Daniel Ikenson (WSJ) Jul 30, 2008
Tariffs are only one of the important barriers to trade.

Oil Price at $90 Is Enough to Save Global Economy
Matthew Lynn (Bloomberg) Jul 30, 2008
There is nothing harder to distinguish than a bull market pause and a turning point. It is only in hindsight that you can tell one from the other.

Doha's Demise
WP Jul 30, 2008
To the litany of recent sour economic news add this unhappy bulletin from Geneva: The global trade negotiations known as the Doha Round broke up yesterday without an agreement.

Trade talks broke down after Chinese shift on food
IHT Jul 30, 2008
China and India have seldom shared the same views on free trade in recent years, but they ended up on the same side at the collapse of world trade talks in Geneva because China made an abrupt about-face.

Oil prices cool off
IHT Jul 30, 2008
The sharp drop in energy prices over the past month is turning into a rare bright spot in a bleak economic landscape.

The End of Free Trade?
WSJ Jul 31, 2008
Doha's demise is a failure of economic leadership.

Reforms that would help euro punch its weight
Benjamin Cohen and Paola Subacchi (FT) Jul 30, 2008
No one knows who speaks for the eurozone. No single body is designated to represent the bloc in international discussions.

One Billion Lives
WP Jul 31, 2008
A global initiative aims to keep tobacco from ravaging the developing world.

The Demise of Doha
WSJ Jul 31, 2008
India dug in its heels, but the U.S. pushed for the wrong compromise.

Global: Potential Growth Is Slowing, Too!
Joachim Fels (MSDW) Jul 31, 2008
We agree that inflation in the US and in the euro area is likely to peak in a couple of months. But we believe that markets are too optimistic about the pace and the extent of the decline.

The Doha round...and round...and round
Economist Jul 31, 2008
After another failed summit, seven years of trade talks may become nine or ten

Brazil rides wave of growth
IHT Jul 31, 2008
Brazil, which has the largest economy in South America, is finally poised to realize its long-anticipated potential as a global player, economists say, as the country rides its biggest economic expansion in three decades.

Blindfolds that wrecked a deal to boost global trade
Philip Stephens (FT) Jul 31, 2008
The Doha failure will not see the global trading system come crashing down. Yet it is more than a missed opportunity. It underscores a dangerous inability among rich and rising nations alike to recognise their individual in their mutual interest.

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