News & Commentary:

Articles/Commentary

A Failed Global Recovery
(Project Syndicate) Jul 1, 2011
The global economy is in the midst of its second growth scare in less than two years. Get used to it: In an anemic post-crisis recovery, we are likely to face unpleasant surprises for years to come.

An African Adventure, and a Revelation
Nicholas D. Kristof (NYT) Jul 1, 2011
An American student and a teacher discover that economies are growing, more girls are in school and gains are being made in nutrition.

World Bank Is Opening Its Treasure Chest of Data
NYT Jul 1, 2011
Robert B. Zoellick, the World Bank president, argues that its most valuable currency isn't money - it's information.

Self-interest in China's helping hand
Jian Junbo (AT) Jul 1, 2011
Self-interest in China's helping hand Examine the substance of Chinese Premier Wen Jiabao's just-ended European tour, including the offer to help the financially challenged region by buying debt, and it's easy to conclude that support for the euro is in China's own interests. Assertions that Beijing has launched a campaign to make political capital from Europe in crisis, however, aren't a match with the truth.

Rice gets a distinct flavor
Raja Murthy (AT) Jul 1, 2011
Hard realities of the affordability of rice, a staple food for more than half the world's population, come into sharp focus as the United Nations estimates record production in 2011. But with the grain taking many cultural flavors beyond a role as a basic food and root of economies in Asia, research that pinpoints the origin of the domesticated crop to a single location is particularly absorbing.

The Financial Rebalancing Act
Alan M. Taylor (FA) Jul 1, 2011
Stop worrying about the global flow of capital.

The political economics of the euro
Thomas Mayer (DB Research) Jul 1, 2011
The history of past real or quasi monetary union of sovereign states suggests that the build-up of severe fiscal imbalances in parts of the union and the monetisation of these deficits have been the key reasons for failure. In order to return EMU to a stable, contractually founded base it seems necessary that governments either take a significant step forward towards a political union – which is very unlikely in our view – or restore the two key pillars on which EMU was built, namely the principles of the central bank’s exclusive focus on the purchasing power of the common money and governments’ full liability for their financial decisions. In the light of the recent momentum in the political debate we would give such an outcome over the coming 6-12 months the highest probability and it is likely be driven by grass-root events. Alternatively, if the political elites remain in control and enforce the continuing execution of unviable adjustment programmes, we see a significant risk of an eventual break-up of EMU.

Toward a Return to the Post-World War II Financial World
Thomas Fricke (Globalist) Jul 1, 2011
Does the debt-reduction path followed by the United States and Britain immediately after World War II provide a way out of Greece's fiscal crisis?

BIS: ‘Boost Interest Rates Soon’
Joachim Fels (MS GEF) Jul 1, 2011
Despite the BIS’s warning, global policy is likely to remain loose for longer and global medium-term inflation pressures look set to rise further.

Modern gender roles and ancient farming
Alberto Alesina, Paola Giuliano & Nathan Nunn (VoxEU) Jul 2, 2011
Gender inequality is an old story. This column presents new evidence to suggest it may be as old as the horse and plough. It says there is a robust negative relationship between historical plough-use and unequal gender roles today. Traditional plough-use is positively correlated with attitudes reflecting gender inequality and negatively correlated with female labour force participation, female firm ownership, and female participation in politics.

Did Someone Say Tech Bubble?
Kevin Ryan (WSJ) Jul 2, 2011
Silicon Alley entrepreneur Kevin Ryan on competing with Amazon--and why Facebook could be worth $1 trillion.

The Future Still Belongs to America
Walter Russell Mead (WSJ) Jul 2, 2011
This century will throw challenges at everyone. The U.S. is better positioned to adapt than China, Europe or the Arab world.

Roads to nowhere or bridges to growth: What do we know about public investment efficiency in developing countries?
Jim Brumby, Era Dabla-Norris, Annette Kyobe, Zac Mills & Chris Papageorgiou (VoxEU) Jul 3, 2011
In the debate over the pros and cons of government spending, the efficacy of public investment is a point on which many conclusions hinge. This column introduces a new Public Investment Management Index that benchmarks the quality and efficiency of the investment process across 71 developing and emerging countries.

The Greek rollover pact is like a toxic CDO
Wolfgang Münchau (FT) Jul 3, 2011
Once the treacherous nature of the contraption is known, the politics of Greek crisis resolution will be even harder.

A plan to save the euro and curb speculators
Giuliano Amato and Guy Verhofstadt (FT) Jul 3, 2011
The answer to this problem is not less Europe, but more – by converting a share of national debt into EU bonds.

Bank Regulation’s Capital Mistake
Amar Bhidé (Project Syndicate) Jul 4, 2011
Reversing the gigantism of banking ought to be the top financial-reform priority. Instead, the debate over bank regulation has been dominated by noisy – and pointless – discussion of banks' capital requirements.

Should China be “Contained”?
Joseph S. Nye (Project Syndicate) Jul 4, 2011
This month marks the 40th anniversary of Henry Kissinger’s secret trip to Beijing, thereby mending the 20-year breach in diplomatic relations between the US and China and enabling them to contain an expansionist Soviet Union. Could the same policy now be turned against a rising China?

Shadow banking and leaking SIVs
Henry Tabe (VoxEU) Jul 4, 2011
In the aftermath of the global crisis and as the turmoil in the sovereign debt market continues, this column argues that policymakers need to get the shadow-banking sector in order if they are to restore confidence in global markets.

Did Someone Say Tech Bubble?
Kevin Ryan (WSJ) Jul 4, 2011
Silicon Alley entrepreneur Kevin Ryan on competing with Amazon--and why Facebook could be worth $1 trillion.

The IMF's moral hazard
Nita Ghei (Washington Times) Jul 4, 2011
Christine Lagarde was quietly appointed as managing director of the International Monetary Fund last week. She takes the place of Dominique Strauss-Kahn, the disgraced former chief who narrowly escaped criminal charges in New York. Tapping yet another European insider for this post is a sign the institution's priority is business as usual. That's bad news for taxpayers, who will not be so lucky as to escape the damage this organization will continue doing to the global financial marketplace.

The Future Still Belongs to America
Walter Russell Mead (WSJ) Jul 4, 2011
This century will throw challenges at everyone. The U.S. is better positioned to adapt than China, Europe or the Arab world.

Could Italy Be Next European Domino to Fall?
Simon Johnson (Bloomberg) Jul 4, 2011
In recent days, Greece’s parliament adopted new austerity measures and Europe’s finance ministers approved another round of Greek loans. So the European debt crisis is under control, right?

America and Europe sinking together
Gideon Rachman (FT) Jul 4, 2011
The debt debates underway in the US and the EU are so inward-looking and overwrought that surprisingly few people are making the connection.

Greece has no future within the eurozone
Martin Jacomb (FT) Jul 4, 2011
The lira’s introduction after Italian unification led to a permanent divide between the economies of the north and south.

Self-serving French recipe is wrong fare for Greece
Patrick Jenkins (FT) Jul 4, 2011
A myopic game of chicken. That is the best description I have heard of the to and fro between the European banks and their governments over Greece.

Brazil risks tumbling from boom to bust
Paul Marshall and Amit Rajpal (FT) Jul 4, 2011
Brazil needs to rebalance its economy in the face of rising consumer debt while banks' access to funding is diminishing.

Lagarde’s Challenges
Raghuram Rajan (Project Syndicate) Jul 5, 2011
Now that the dust has settled over the selection of the IMF’s managing director, the Fund can return to its core business of managing crises. But Christine Lagarde, a competent and well-regarded technocrat, will have her hands full with three important tasks.

Will Brazil’s Good Times Roll On?
Teresa Ter-Minassian (Project Syndicate) Jul 5, 2011
Brazil's economy was among the first to rebound strongly from the recent financial crisis, and it has since maintained impressive growth. But, while the country has emerged as Latin America’s clear leader and a key global player, the good times will last only if it addresses a host of mounting economic-policy challenges.

Why More Migration Makes Sense
Ian Goldin & Geoffrey Cameron (Project Syndicate) Jul 5, 2011
In almost every rich country, anti-immigrant fervor is at fever pitch. But it is a malady that must be resisted if these societies are to continue to prosper and developing countries are to fight poverty sustain economic growth.

The capital flow conundrum
Uri Dadush & Bennett Stancil (VoxEU) Jul 5, 2011
Economists and policymakers alike tend to assume that capital should flow from rich to poor countries, but in recent years the opposite has happened. This column explains why and warns that developing countries should not assume they can or should run large current deficits simply because they are poor.

The End of Currency Wars?
Richard Clarida (PIMCO) Jul 5, 2011
We see shifting global currency trends potentially easing tension in international trade. International capital is flowing to countries with good growth prospects and to countries with central banks confident enough to raise interest rates. Certain nations are placing controls on capital or intervening in currency markets with an eye to maintaining economic competitiveness. We see central banks in the U.S. and the U.K. winding down monetary stimulus that has exacerbated the situation. Also, we see potential for emerging market currencies to appreciate, and that may give developed nations a boost.

Is Europe’s Debt Crisis a “Lehman Moment” for America?
Mohamed El-Erian (PIMCO/Reuters) Jul 5, 2011
With its high unemployment and stretched balance sheets, today’s U.S. economy can ill-afford a negative shock from abroad. Yet, this is what it is experiencing. Europe’s debt problem is a headwind for what remains a disappointing U.S. economic recovery. There is now broad-based recognition of America’s persistent economic weakness. The Federal Reserve has been forced again to revise downwards its growth projections for both 2011 and 2012. In order to avoid a repeat of the total Lehman paralysis in the face of an external shock to the U.S. economy three conditions must be met: a banking system that remains robust, no disruptions to money market funds and limited blockage to the plumbing of the country’s payments and settlement system.

Moment of truth for the eurozone
Martin Wolf (FT) Jul 5, 2011
The real questions are over how to manage a co-operative debt restructuring and how to bring about a return to growth.

Credit rating agencies place ECB in a bind
Richard Milne (FT) Jul 5, 2011
Trichet's placing of Athens' fate in hands of S&P, Moody's and Fitch illustrates difficulties of breaking the reliance on the ratings system.

Fumbling Toward Default
NYT Jul 6, 2011
Europe's approach to the Greek debt crisis remains far too blinkered and passive.

The Ideological Crisis of Western Capitalism
Joseph E. Stiglitz (Project Syndicate) Jul 6, 2011
The US economy's troubles should have taught Americans (and others) that they need greater equality,stronger regulation, and a better balance between the market and government. Instead, resurgent right-wing economics once again threatens the global economy – or at least Europe and America.

Technology and Inequality
Kenneth Rogoff (Project Syndicate) Jul 6, 2011
Until now, the relentless march of technology and globalization has played out hugely in favor of high-skilled labor, helping fuel record-high levels of income and wealth inequality around the world. But that march is now turning against skilled workers, promising to narrow the equality gap.

The fear of contagion in Europe
Paolo Manasse & Giulio Trigilia (VoxEU) Jul 6, 2011
Most analysts agree that Greece is insolvent. This column argues that the issue is whether Greece’s troubles are contagious.

WTO Panel Rules against China's Export Restrictions on Raw Materials
Bridges Weekly Trade News Digest, Volume 15, Number 25 Jul 6, 2011
In a high profile dispute over access to Chinese natural resources, a WTO panel on Tuesday 5 July found that China violated international trade rules by restricting the exportation of nine raw materials, refuting Beijing's claim that these restrictions were based on environmental grounds. The panel sided in all key points with the EU, Mexico, and the US, which jointly initiated the case (DS394, 395, 398) in 2009.

US FTAs Reach Congressional Committees, Only to Face Political Limbo over Worker Aid
Bridges Weekly Trade News Digest, Volume 15, Number 25 Jul 6, 2011
After signs last week from the White House that the US Congress was ready to move on the long-awaited free trade agreements with Colombia, Panama, and South Korea, Republicans in both chambers have renewed their push against the reauthorization of extensions to a worker aid programme, even at the expense of slowing the ratification of these FTAs.

WTO Disputes Roundup: Possible Breakthroughs in Beef and Zeroing Cases
Bridges Weekly Trade News Digest, Volume 15, Number 25 Jul 6, 2011
The past few weeks have seen surprising progress on two major WTO controversies, with South Korea and Canada appearing to have settled their differences on market access for Canadian beef, and the US deciding not to appeal a WTO panel report that once again found Washington's zeroing practices in reviews to be a violation of international trade law.

China's exports don't fuel boom
John Lee (Washington Times) Jul 6, 2011
Marking the 90th anniversary of the Chinese Communist Party last Friday, President Hu Jintao told colleagues the party's survival depends on the twin pillars of economic growth and social stability. While China undoubtedly needs both for the party to remain in power, the dilemma for the country's leaders is that the way China achieves rapid economic growth is increasingly the reason behind growing instability in Chinese society. In fact, loosening rather than tightening its grip on power is more likely to ensure that there is harmony rather than turmoil throughout China.

A Crisis Averted in Greece, but More Problems Lie Ahead
Jacob Kirkegaard (PIIE) Jul 6, 2011
If all goes according to plan, the Greek parliament's approval of new austerity measures at the end of June, followed by the euro area's disbursement of the fifth tranche of the current Greek Loan Facility, will then lead to approval of the latest rescue of Greece by the International Monetary Fund (IMF) Board, just in time to provide a baptism by fire for Christine Lagarde. One of Lagarde's last major responsibilities as French finance minister will have been to participate in the eurogroup finance ministers' conference call to seal this deal. (Presumably she was calling from Washington, DC, where she was preparing to take over the IMF the first week of July.) One of her first actions as managing director of the IMF will be to oversee the board's approval of these same financing commitments. As a lawyer, Lagarde says she can seamlessly review the facts from different institutional perspectives. As a result, disbursement of the fifth aid tranche to Greece now seems virtually certain before July 15th.

The Path Ahead for Greece
Elena Panaritis (Globalist) Jul 6, 2011
Greece's fiscal woes continue to cast a shadow over the global economy. What Greece must do to put itself on sounder financial footing.

Seeing Double at Central Banks
Linda Yueh (Project Syndicate) Jul 7, 2011
In the wake of the recent global financial crisis, macroprudential regulation is the new term of art among central bankers, supplementing (or supplanting?) their inflation-targeting regimes. This shift in focus could radically change monetary policy, but for better or worse?

A Tale of Two Defaults
Daniel Gros (Project Syndicate) Jul 7, 2011
Karl Marx famously wrote that history repeats itself as farce. In the case of Greece, history looks more like a much larger version of Argentina’s tragedy.

The Euro: Its Inevitable End
Juraj Karpis (Mises Daily) Jul 7, 2011
The political project of the euro is in deep trouble.

The End of the Road for the NAFTA Trucking Dispute?
Barbara Kotschwar (PIIE) Jul 7, 2011
This week marked (hopefully) the beginning of the end of one of the longest-running cases in NAFTA history. A Memorandum of Understanding (MOU) signed by the United States Department of Transportation and Mexico's Secretaries of Transportation and Communication, will bring the United States closer to completing its obligations under the North American Free Trade Agreement (NAFTA) — 15 years, 6 months, and 20-some days later than originally intended.

Sea, ships and solar can get Greece growing
Kemal Dervis (FT) Jul 7, 2011
While the financial engineering work has to go on, it is time that an equal effort is spent on how to support growth of output and employment.

Debt reduction: Handle with care
Economist Jul 7, 2011
“Deleveraging” will dominate the rich world’s economies for years. Done badly, it could wreck them

Europe for Sale
Francois Godement (Project Syndicate) Jul 8, 2011
In Bulgaria last March, one of Chinese Premier Wen Jiabao's ministers quipped that “there will always be someone pointing fingers at us whether or not we buy.” But, as Wen’s recent trip to the UK, Germany, and Hungary showed, China is indeed buying – and EU leaders are eagerly selling.

Short-Term Gain, Longer-Term Pain?
Manoj Pradhan (MS GEF) Jul 8, 2011
Monetary policy in EM economies might be done normalising, but there may be more work to do in 2012 if the upside risks to EM growth and inflation are realised.

Is faster trade more trade? Evidence from EU enlargement
Cecília Hornok (VoxEU) Jul 9, 2011
Trade barriers that delay transactions are like sand in the wheels of a global economy in which firms trade frequently and international production is fragmented. This column presents evidence showing how the elimination of border controls and customs procedures within the EU has contributed to faster trade, lower trade costs, and larger cross-country trade.

China's Growth Doesn't Ensure Mutual Fund Gains
NYT Jul 9, 2011
The disparity between the performance of China's economy and its stocks illustrates the risk in mutual funds that invest in just one developing nation.

Greece's Choices in Debt Crisis Are All Daunting
Tyler Cowen (NYT) Jul 9, 2011
Solving the Greek debt crisis will require extremely tough decisions and compromises both for Greece and the European Union.

Why the global financial crisis has been wasted
Nauro F Campos & Jeffrey B Nugent (VoxEU) Jul 10, 2011
If economic crises make the short-run pains of reforms easier to bear, then crises could yield considerable long-run benefits. But this column argues that the recent global financial crisis has been wasted thus far. It suggests that it is political crises – and not economic turmoil – that actually bring about reforms.

Don’t blame Moody’s for a messy euro crisis
Wolfgang Münchau (FT) Jul 10, 2011
Everybody hates the rating agencies. But last week, they did us a favour. They showed that populism will not work.

Learning from Crises
Harold James (Project Syndicate) Jul 11, 2011
Crises are often learning opportunities. Unfortunately, so far the world seems to have learned very little from the recent financial crisis: with the US worried by its anemic economic recovery, Europe paralyzed by fears for the euro's survival, and emerging markets wrestling with asset-price bubbles, the situation today is as dangerous as it was in 2007.

Europe Needs a Plan B
George Soros (Project Syndicate) Jul 11, 2011
If Europe’s seemingly inexorable disintegration process is to be arrested and reversed, both Greece and the eurozone must urgently embrace a Plan B that recognizes the inevitability of default. And the European elite needs to stop treating the status quo as sacrosanct.

Why banks are under-taxed and what to do about it
Harry Huizinga, Johannes Voget & Wolf Wagner (VoxEU) Jul 11, 2011
What new policies should be included in financial and regulatory reforms? This column argues that banks are under-taxed along many dimensions and analyses a proposed broad tax on financial-sector income.

U.S. Greens vs. Chile's Poor
Mary Anastasia O'Grady (WSJ) Jul 11, 2011
Environmental groups in America lobby to block Chilean energy development.

BRIC banking systems after the crisis
Markus Jaeger (DB Research) Jul 11, 2011
State-led economic development, if successfully implemented, is appropriate during the early “catch up” phase of economic growth. However, as growth becomes more dependent on indigenous innovation and hence a dynamic private sector, a shift to more market-led rather than state-directed development becomes necessary. This also applies to the banking sector. Subject to proper regulation, banking systems that rely on private-sector banks and market-led credit allocation will eventually tend to generate superior economic outcomes. That said, we are unlikely to see a significant reduction in public-sector bank ownership in the BRIC countries anytime soon, nor, for that matter, a tangible increase in foreign ownership.

Why banks and supervisors must act now
Mark Carney and Fabio Panetta (FT) Jul 11, 2011
The bottom line is that deteriorating fiscal conditions have an adverse impact on the stability of banking systems at home and abroad.

Government-Sponsored Meltdown
Peter Wallison (WSJ) Jul 12, 2011
Fannie Mae did not contribute 'marginally' to the financial crisis. It was the source of the declining mortgage underwriting standards that brought down the system.

Rome strains Italophile Germans
Quentin Peel (FT) Jul 12, 2011
The contagion in sovereign debt that is spreading from Greece to Italy could scarcely have come at a more perilous moment for Germany.

Eurozone policymakers must grasp the nettle
John Plender (FT) Jul 12, 2011
There is no way round the fact that the markets believe there is a solvency gap in southern Europe that can only be met by debt relief

Why Food Price Volatility Doesn't Matter
Christopher B. Barrett and Marc F. Bellemare (FA) Jul 12, 2011
In proposing measures to curb erratic swings in food prices, global leaders have conflated high prices with unstable ones. That's a mistake. In fact, the real problem is expensive food, so policies aimed at curbing volatility -- such as export bans, price stabilization schemes, and subsidies for farmers -- won't help those who need it. Read

Navigating the Road to Riches
Otaviano Canuto (Project Syndicate) Jul 12, 2011
The “middle-income trap” has snared many developing countries: they succeeded in evolving from low per capita income levels, but then appeared to stall, losing momentum along the route toward the higher income levels of advanced economies. Does moving up the income ladder get harder the higher one climbs?

How emerging donors are creating policy space for Africa
Helmut Reisen & Jean-Philippe Stijns (VoxEU) Jul 12, 2011
Many discussions of official development assistance express concerns about China's growing investment and involvement in Africa economies. This column, summarizing the 2011 African Economic Outlook report, emphasizes the benefits of emerging economies' increasing presence in Africa, including the opening of African policy space due to Western donors' decline in relative influence.

Is Europe an optimal currency area?
Carlo Favero (VoxEU) Jul 12, 2011
Is the euro doomed? This column argues that economic differences within Europe, clearly exposed by the current crisis, are reasons to doubt the sustainability of the single currency.

Dodd-Frank: One year on…
Viral Acharya, Thomas F. Cooley, Matthew Richardson & Ingo Walter (VoxEU) Jul 12, 2011
22 July marks the first anniversary of the signing of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act, the most comprehensive US regulatory effort for financial markets since the 1930s. This column introduces an eBook analysing where the regulatory process stands after one year and where it is headed.

How 28 poor countries escaped the poverty trap
Charles Kenny (Guardian) Jul 12, 2011
Zambia and Ghana are the 27th and 28th countries the World Bank has reclassified as middle-income since the year 2000.

The Way Out of Greece’s Insolvency — And Into Europe’s Future
Elena Panaritis (Globalist) Jul 12, 2011
How will building up Greece's capital base provide a long-term solution to the country's fiscal woes?

General Marshall on the Aegean
Barry Eichengreen (Project Syndicate) Jul 13, 2011
So far, the EU's Greek strategy has amounted to squeezing blood from a stone. Instead, Europeans might usefully look back 60 years, to a time when their own countries, perched on the brink of a similar collapse, received the help that they needed to recover – help that has put them in a position to do something similar for Greece today.

Measuring systemic risk of the European banking sector
Sascha Steffen (VoxEU) Jul 13, 2011
Last year’s European bank stress tests were faulty to say the least. For example, those tests failed to find problems with any of the Irish Banks that soon afterwards dragged Ireland into its current crisis. While the soon-to-be-released stress tests may do better, the previous shortcomings suggest that a broader, more transparent evaluation is needed. This column proposes a new way of assessing systemic risk using publicly available stock price data and financial statement information.

Medicines Patent Pool Receives First Licence for HIV Drugs from Major Pharmaceutical Company
Bridges Weekly Trade News Digest Volume 15, Number 26 Jul 13, 2011
Gilead Sciences has become the first pharmaceutical company to set up a licensing agreement with the recently-established Medicines Patent Pool (MPP), in a move aimed toward increasing access in developing countries to drugs that treat HIV and Hepatitis B. The landmark deal was announced yesterday, 12 July.

Trade Policy Review Lauds EU for Resisting Protectionism, Marks Areas for Improvement
Bridges Weekly Trade News Digest Volume 15, Number 26 Jul 13, 2011
WTO Members gathered last week to review a report from the trade body's Secretariat on the EU's trade policies over the last two years; the review praised the 27-member bloc for "restrain[ing] from tightening restrictions on imports in response to the crisis" - a decision that had a "stabilising effect on the multilateral trading system." However, the Trade Policy Review (TPR) found that the EU still has room for improvement in the areas of intellectual property, anti-dumping measures, agricultural support and tariff policies, and regulatory practices.

WIPO Conference Reflects Contrasting Views on Climate Change, Innovation, IP
Bridges Weekly Trade News Digest Volume 15, Number 26 Jul 13, 2011
The possibility of leveraging innovation and intellectual property to address the climate change challenge was the key focus of this week's World Intellectual Property Organization (WIPO) conference. However, the 11-12 July gathering saw developed and developing countries express contrasting views on the role of intellectual property in the diffusion of climate friendly technologies.

WTO Environment Committee Puts the Spotlight on Climate Change
Bridges Weekly Trade News Digest Volume 15, Number 26 Jul 13, 2011
The trade dimension of border measures - one of the more challenging issues at the trade and climate change nexus - took centre stage at last week's meeting of the WTO's Committee on Trade and Environment (CTE). Members discussed a proposal, tabled by Singapore, which stressed the importance of the multilateral trading system and environmental protection. The submission emphasised the need for these two fields to be mutually supportive for the sake of promoting sustainable development.

Horn of Africa Drought, Food Crisis: Agricultural Trade Policies Questioned
Bridges Weekly Trade News Digest Volume 15, Number 26 Jul 13, 2011
Severe drought has left some ten million people in the Horn of Africa short of food and water, the UN has warned. As the crisis grows, some experts are questioning the role of agricultural trade and investment policies in the region.

BRICs coming unstuck
Martin Hutchinson (AT) Jul 13, 2011
The economies of Brazil, Russia, India and China were the big positive in a world struggling during the 2008-9 recession. Two years on, those countries are looking less confident as the bills come in, raising the question of where growth will come from next.

Playing ostrich over high-speed trading not an option
Larry Tabb (FT) Jul 13, 2011
Regulators need to weigh the risks of new rules against the costs and unintended consequences of change.

Adapt or Die
Michael Spence (Project Syndicate) Jul 14, 2011
The major emerging economies have succeeded by focusing not only on macro and monetary stability, but also on adaptation, guided by a forward-looking (though inherently imperfect) assessment of coming micro and macro structural shifts and the measures needed to support them. Can the major developed countries do the same?

National buybacks: The solution for Greek debt
Gary Clyde Hufbauer & Jacob Funk Kirkegaard (VoxEU) Jul 14, 2011
What to do about Greece? The face value of Greek sovereign debt is now around 150% of GDP and rising. This column proposes a debt buyback scheme and outlines how it could be achieved to the benefit of the whole of Europe.

Too Much Debt Means the Economy Can’t Grow
Carmen Reinhart and Kenneth Rogoff (Bloomberg) Jul 14, 2011
As public debt in advanced countries reaches levels not seen since the end of World War II, there is considerable debate about the urgency of taming deficits with the aim of stabilizing and ultimately reducing debt as a percentage of gross domestic product.

How to Save the Euro
WSJ Jul 14, 2011
The Germans will have to pay one way or another.

Blocking Freer Trade
WSJ Jul 14, 2011
Senate shenanigans are mucking things up.

The Busts Keep Getting Bigger: Why?
Paul Krugman and Robin Wells (NYRB) Jul 14, 2011
The great financial crisis of 2008–2009, whose consequences still blight our economy, is sometimes portrayed as a “black swan” or a “100-year flood”—that is, as an extraordinary event that nobody could have predicted. But it was, in fact, just the most recent installment in a recurrent pattern of financial overreach, taxpayer bailout, and subsequent Wall Street ingratitude. And all indications are that the pattern is set to continue.

Charlemagne: The euro's real trouble
Economist Jul 14, 2011
The crisis of the single currency is political as much as financial.

Once Greece goes...
John Lanchester (LRB) Jul 14, 2011
‘I speak of the Greek default as a sure thing because it is,’ John Lanchester writes. ‘The markets are pricing Greek government debt as if it has already defaulted.’ The ‘new plan A’ to rescue the Greek economy ‘is somewhere on the spectrum of unlikely to impossible’. And while the European Central Bank, EU and IMF could ‘write a cheque and buy the Greek economy’ – or Ireland’s or Portugal’s – a Spanish default, which would be next in line, ‘would destroy the credibility of the euro’. The underlying problem, Lanchester writes, is that ‘the German economy is too big and too powerful for the health of its neighbours’, and interest rates that suited German exporters created ‘toxic credit bubbles’ in Greece, Ireland and Spain. The system is sustainable ‘as long as German taxpayers are willing to pay for the busts and bailouts which will inevitably ensue.’ The question is, how long will that be?

Why we will be poorer
Spengler (AT) Jul 15, 2011
Rapidly aging populations in the developed world, Japan and Europe especially, will place enormous demands on public pensions and health systems just as the number of taxpayers to pay the bills shrinks. Citizens of industrial nations have no choice but to accept lower returns on investment, reduced government largesse, and a poorer existence.

Banishing Starvation
Franz Fischler (Project Syndicate) Jul 15, 2011
Of the world’s almost seven billion people, about one billion are starving, and food shortages could grow much worse, as world population is expected to reach nine billion by 2050 or earlier. But, with the right programs, we can produce enough food for everyone – and, indeed, eradicate starvation altogether.

China’s housing bubble: New evidence
Christian Dreger & Yanqun Zhang (VoxEU) Jul 15, 2011
For a while now, analysts have been arguing there is a bubble in China’s property market. Using records from 35 major cities this column finds evidence of a housing bubble. It compares house prices to cointegrated fundamentals and finds that property in China is in general overvalued by around 20% – and even more so in the boom towns.

The Eurozone crisis: What needs to be done
Guido Tabellini (VoxEU) Jul 15, 2011
The Eurozone crisis is tearing Europe apart. This column argues that Eurozone leaders must (i) agree to create European-level institutions to monitor national budget and banking policies and (ii) draw a line between solvent and insolvent Eurozone nations before the markets do it for them. It adds that we are now discovering that a loss of sovereignty became inevitable the day we decided to create the single currency.

Looking at Greece in the Argentinean mirror
Domingo Cavallo (VoxEU) Jul 15, 2011
Many argue that Greece should drop the euro like Argentina dropped the dollar in 2002. In this column, Domingo Cavallo – who was Argentina's finance minister during the heart of its crisis – argues that exiting the euro would be wrong. Argentina’s growth recovery after it de-pegged the peso was due to exogenous developments in global commodity prices – not to the peso devaluation. He also suggests steps for an orderly restructuring of Greek debt.

Europe's banks: Ignoring the obvious
Economist Jul 15, 2011
Imagine a patient clutching at his heart, complaining of sharp chest pains. A doctor arrives, examines him carefully and pronounces him healthy—provided he is not having a cardiac arrest. The same air of unreality infects today’s stress-test results for European banks: most institutions are fine unless there is a sovereign-debt crisis.

The Neuroscience of the Debt Debate, or Why Cooperation Takes a Backseat to Mistrust
Jason Castro (SciAm) Jul 15, 2011
Our elected leaders are (probably) not distrusting jerks. Game theory suggests that cooperation is natural but that morality could undercut the tendency

Stress Tests Are Not Enough to Fix the Banks
Nicolas Véron (PIIE/FT) Jul 15, 2011
The situation in Europe has developed from a financial and banking crisis to a sovereign debt crisis, and from there to an institutional crisis, as the European Union’s collective inability to make effective decisions becomes an ever larger part of the problem. These three components of the predicament feed each other; they also threaten international financial stability. The banking component can no longer be separated from sovereign and institutional developments. This is why today's publication of stress tests results, while useful, is unlikely to be the game-changer it could have been two years ago. The London-based European Banking Authority (EBA) has led the tests with a firmer hand than many anticipated. But even with these disclosures, individual member states remain in charge of ensuring that the weaker banks raise the capital they need, or are properly sold or restructured if they cannot. On past experience, many will be reluctant to do so, allowing Europe’s banking system to remain fragile.

What a Multi-Speed World May Mean for Equities
Anne Gudefin and Masha Gordon (PIMCO) Jul 15, 2011
Equity investors may look in unfamiliar places as they navigate potential shifts in the global economy. An apparent rebound in risk tolerance since the financial crisis has supported higher equity valuations. Emerging market economies appear to be undergoing a mid-cycle rebalancing. We view this as a welcomed cyclical adjustment rather than the end of their growth cycle; long-term fundamentals remain intact. We believe advanced economies should continue to see headwinds to growth, and that potentially means investors may be generally willing to pay lower multiples to earnings. But we see select opportunities, including developed-nation companies with exposure to the developing world.

Europe lost in the desert
Reuven Brenner (AT) Jul 16, 2011
Europeans appear devoid of purpose after too long being sustained by the good fortune of their economic and geopolitical place in the world. With this "manna from heaven" period over, they must find new leaders who can reinvigorate their souls and help them rediscover the land of milk and honey.

Our Broken Escalator
Nicholas Kristof (NYT) Jul 16, 2011
The best antipoverty investment in the world - from New York to Nigeria - is education. So why do we keep cutting it?

Sovereign Debt Weakens European Banks
NYT Jul 17, 2011
The latest bank stress test revealed how exposed banks are to the government bonds of Greece, Portugal, Spain and Italy.

Lessons from Latvia
Robert J. Samuelson (WP) Jul 17, 2011
What we can learn from the country’s recovery.

Italy’s unexpected crisis
Lawrence Summers (WP) Jul 17, 2011
Italy’s recent market tumult shows that the continent needs a more dynamic economic policy.

Understanding financial cycles
Stijn Claessens, M Ayhan Kose & Marco E. Terrones (VoxEU) Jul 17, 2011
The recent crisis has not only been a painful reminder of the importance of financial cycles, but it has also exposed our limited knowledge of them. This column explores two key questions on financial cycles: What are their main features and what happens when cycles in different financial markets coincide?

Contagion in Three Forms Now Has Grip on Europe
Simon Johnson (Bloomberg) Jul 17, 2011
There are three types of contagion in a financial crisis, when the potential collapse of a firm, bank or country threatens to spiral out of control. The European Union today has all three.

Defaulting to Big Government
Simon Johnson (Project Syndicate) Jul 18, 2011
Opponents of raising the US debt ceiling argue that the federal government is too big relative to the economy, and that drastic measures are needed to bring it under control. But the consequences of any default would, ironically, actually increase the size of government relative to the US economy.

Small Economies, Big Problems, and Global Interdependence
Kemal Dervis (Project Syndicate) Jul 18, 2011
At least on paper, Greece should not be a systemically important economy. Yet there are several reasons why the Greek crisis is having substantial spillover effects – and Greece is not alone in this respect among small economies.

The Eurozone’s Last Stand
Nouriel Roubini (Project Syndicate) Jul 18, 2011
The eurozone’s current muddle-through approach to its members' sovereign-debt crises is an unstable disequilibrium: kicking the can down the road, and throwing good money after bad, will not work. Only a comprehensive strategy can rescue Europe's monetary union.

How to save the eurozone
Lawrence Summers (FT) Jul 18, 2011
No country can be expected to generate huge primary surpluses for long periods for the benefit of foreign creditors.

Plan D stands for default...and the death of the euro
Wolfgang Münchau (FT) Jul 18, 2011
The crisis is now moving at a rate that exceeds Angela Merkel‘s political speed limit.

Africa and 'Obama's Embargo'
WSJ Jul 18, 2011
A provision of Dodd-Frank boomerangs on the continent's poor.

Are Emerging Markets Ready to Lead the Global Economy?
Lupin Rahman (PIMCO) Jul 18, 2011
Emerging economies are dynamic centers of growth but face challenges to surpassing developed nations. We forecast emerging economies will expand at a faster pace than advanced economies over the secular horizon. The challenge for emerging market central bankers is to remain ahead of inflation expectations and retain credibility on inflation targeting. We feel they are well positioned for this. We believe global investors remain significantly underweight emerging market assets. We expect this underallocation to decrease, providing multiyear support for the asset class.

The Chemistry of Contagious Defaults
Vlad Putyatin & Svetlana Maslova (Wilmott) Jul 18, 2011
What is common in one subject may prove revolutionary in another. Approaches developed in one discipline can be innovative in a completely different field, which may not have any obvious ties with the original discipline at a first glance.

Lagarde Should Buck IMF Tradition and Get Tough
Amity Shlaes (Bloomberg) Jul 18, 2011
Men are from Mars, but the IMF is from Venus. Or should be. That’s the message the International Monetary Fund’s new managing director, Christine Lagarde, delivered when she was campaigning for the job.

Europe risks creating another Icesave
Mojmír Hampl and Vladimír Tomšík (FT) Jul 18, 2011
A large bank is like an oil tanker: if liquidity, assets and liabilities flow freely inside, eventually the crude oil will cause the tanker to capsize in a storm.

Europe stress tests undermined by indecision
Patrick Jenkins (FT) Jul 18, 2011
Without a decisive plan to impose losses, roll over debt and facilitate buy-backs, the bank stocks of the region will remain untouchable.

Conditions for the next crisis are firmly in place
Andrew Smithers (FT) Jul 18, 2011
Debt is at pre-crisis levels and equities are seriously overpriced.

Counterpoint: Debunking Myths About China
Eric X. Li (NYT/IHT) Jul 18, 2011
Hypotheses that do not stand up to facts and yet still dominate people's consciousness are harmful.

The IMF’s Switch in Time
Joseph E. Stiglitz (Economists' Voice) Jul 18, 2011
So much for the Washington Consensus. The IMF has finally begun to come around and has realized that unfettered markets can create dangerous instability and inequality, according to Joseph Stiglitz of Columbia University.

Avoiding the Next Eurozone Crisis
Lorenzo Bini Smaghi (Foreign Affairs) Jul 18, 2011
The EU's current framework cannot prevent or manage fiscal problems effectively. This does not mean that it is too late to build one that can. In addition to better financial cooperation, eurozone countries need to deepen their political coordination as well.

Autumn of the Empire
Joshua Clover (LARB) Jul 18, 2011
Most striking and most dramatic is the discovery that each of these long centuries has itself been divided into three phases, choreographically consistent: a merchant phase based on trade, followed by a phase of industrial expansion, and finally a period of financialization, in which economic vitality moves to the banking sector. It is a febrile vitality indeed, burning hot and fading away; the shift to finance is always, in Braudel’s lovely phrase, “a sign of autumn.” And when the finance era runs its course, so does the empire.

The Talmud and Greek Debt
Mario I. Blejer (Project Syndicate) Jul 19, 2011
There are two ways to look at Greece’s majestically unsustainable sovereign-debt mountain – both correct, though difficult to reconcile. In these circumstances, the Talmud, the ancient repository of Jewish legal commentary – and one of the oldest sources of human thought on morality and economic activity – might hold the key.

Domestic financial regulation and external borrowing
Sergi Lanau (Project Syndicate) Jul 19, 2011
The global crisis has forced a root-and-branch rethink of financial regulation. This column discusses the international dimensions. It presents new evidence to suggest that non-banks tend to borrow more abroad when domestic regulation is tight.

Should TARGET balances be restricted?
Clemens Jobst (VoxEU) Jul 19, 2011
The debate over TARGET balances and whether there is an ongoing stealth bailout in the Eurozone has attracted attention from top economists and journalists in the past month. This column argues that the reason why the arguments keep dragging on is the lack of a clear framework for the discussion, something this column aims to provide.

Little time for Italy
Paolo Manasse & Giulio Trigilia (VoxEU) Jul 19, 2011
The Eurozone crisis now extends to Italy. Markets' pricing of credit default swaps shows that Italy’s troubles are home-baked and that matters are rapidly coming to a head. The risk of default has now become concentrated on the very short run. This suggests that Eurozone leaders may be rapidly punished by markets if they fail to take convincing steps this week.

Congress Bickers as Bond Markets Brace for Total Panic
William D. Cohan (Bloomberg) Jul 19, 2011
Hold on for just a New York minute now and consider the powerfully serious message the bond market sent last week about the political dithering in Washington and in Europe’s capitals. “Pay attention folks,” as the investor Gifford Combs e-mailed me on Friday. “This is not a drill.”

The Stress Europe Won't Test
WSJ Jul 19, 2011
Regulators don't want to reveal how vulnerable banks are to a sovereign default.

Joke Is on China as US's AAA Becomes Laughable
William Pesek (Bloomberg) Jul 19, 2011
Suddenly that $3 trillion of currency reserves looks like a bad idea. Make that very bad for China, as investors display an obvious preference for yen over dollars.

CEEMEA: Macro Spills and Beyond: Thoughts on Contagion
Pasquale Diana, Jaroslaw Strzalkowski, Paolo Batori & James Lord (MS GEF) Jul 19, 2011
We look at the possible channels of contagion from the euro area to CEE, and see increasing risks.

How to Orchestrate an Orderly and Credible Restructuring of Greece’s Debt
Myles Bradshaw (PIMCO) Jul 19, 2011
There is no guarantee that Greece will pull off an orderly debt restructuring, but early attention to several factors would increase the probability. Identifying how much solvency relief Greece needs is complicated, not least because there is no magic debt ratio that is sustainable. Identifying how much political capital might be bought in European Union creditor countries and beyond is more straightforward. Contagion risks are positively correlated with any benefits Greece might experience from a potential restructuring.

How to Contain the European Debt Crisis
Francesco Giavazzi & Anil Kashyap (Bloomberg) Jul 19, 2011
With Italy now paying the same rates as Spain to finance its debt, the European crisis has reached a critical stage.

Let Europe pay for its policy failures
Alan Beattie (FT) Jul 19, 2011
The IMF is a crisis lender, not a benevolent uncle for delinquent rich countries, and it needs to be clear that it can get its money back.

American lessons in how to run a single currency
John Kay (FT) Jul 19, 2011
When New York crassly mismanaged its financial affairs, the president’s response was famously paraphrased as ‘Ford to City: drop dead!’.

EU creditors must recognise their losses
Komal Sri-Kumar (FT) Jul 19, 2011
Bail-outs have offered little relief because they were not intended to improve the debt-ridden countries' economies.

Opinion: Can Greeks Become Germans?
Thomas L. Friedman (NYT) Jul 19, 2011
The story of the economic crisis in Greece is a story about values.

Europe at the Brink
NYT Jul 19, 2011
Time is running out for Europe's leaders to extricate Greece from its current unsustainable debt.

Crisis: from EU to ER to er...
Robert Shrimsley (FT) Jul 20, 2011
Eurozone leaders’ efforts to work out the best way of helping a blood-spattered accident victim outside their summit.

China’s rapid urbanisation could prove illusory
Jamil Anderlini (FT) Jul 20, 2011
The Hukou system is a major barrier to rural migrants settling down permanently, which means their move to cities is easily reversible.

Developed world cannot thrive at 'stall speed'
Bill Gross (FT) Jul 20, 2011
Capitalism is in danger as a high debt-to-GDP ratio could see real growth rates stuck at 2%

Murdoch, Moody's and Mandelbrot
Chan Akya (AT) Jul 20, 2011
The scandal enveloping Rupert Murdoch's News Corp echoes the evolution of the crisis in global markets, seen in the series of events that threatens to bring the United States' credit rating down. In circumstances triggering conflict, lost credibility or a collapse in confidence, the same trajectory applies - and the smart money follows mathematician Benoit Mandelbrot.

How to End the Greek Tragedy
Andres Velasco (Project Syndicate) Jul 20, 2011
Greece’s debt-service burden is too large, and it must be reduced in one of two ways: sharply cutting the interest rate paid by Greece, or reducing the face value of the debt. European policymakers are leaning towards the second option, but they evidently have not yet fully considered the implications.

The Battle of the Bonds
Robert Skidelsky (Project Syndicate) Jul 20, 2011
Every week, the preposterous coterie of European bankers and finance ministers drags itself from one capital to another to discuss which default/restructuring plan to adopt. No one who is not well versed in financial legerdemain can make much sense of the various schemes, but behind them lie two moral attitudes, which are much easier to grasp.

Resolve against protectionism weakens since the Seoul G20 Summit: The 9th Report of the Global Trade Alert
Simon J Evenett (VoxEU) Jul 20, 2011
Despite the public commitments made at the Seoul G20 summit, this year protectionism has slipped off the work programme of G20 nations. The latest evidence published in the 9th Report of the Global Trade Alert, summarised here, shows that government resolve against protectionism has weakened as global economic prospects have dimmed. The global trading system is not out of the protectionist woods.

Constitutional solutions to the Eurozone’s design flaw
Thomas F. Cooley & Ramon Marimon (VoxEU) Jul 20, 2011
The sovereign-debt crisis spreading through Europe is threatening the existence of the single currency. Meanwhile in the US, debt has been a problem for many states without threatening the US itself. This column proposes a way of preventing future crises in Europe by learning how policymakers in the US achieve fiscal prudence without loss of sovereignty.

A Spanish Reckoning
WSJ Jul 20, 2011
Madrid's contribution to Europe's systemic financial risk.

WTO Meeting Highlights Aid for Trade Success, Though Work Remains
Bridges Weekly Trade News Digest Volume 15, Number 27 Jul 20, 2011
Delegates, civil society members, and private sector representatives meeting in Geneva this week spoke to the successes and shortcomings of the WTO's Aid for Trade (AFT) initiative, as the spectre of Doha coloured the background of many presentations. Key themes focused on the fact that financial commitments for AFT initiatives have skyrocketed in recent years and the need for work to be done in monitoring and evaluation of on the ground impacts. The Third Global Review of Aid for Trade, which took place on 18 and 19 July, aimed to evaluate the six-year-old initiative's progress in helping developing countries build their trade capacity.

Dispute Panel Set to Hear Japan, Canada Renewable Energy Row
Bridges Weekly Trade News Digest Volume 15, Number 27 Jul 20, 2011
On Wednesday, 20 June, the WTO saw the start of the first climate change-related dispute in its history. After much expert discussion on the issue, the WTO might now be beholden to rule on the relationship between green energy support and national stimulus measures.

Mandatory Energy Efficiency Measures for International Shipping Adopted at London Meeting
Bridges Weekly Trade News Digest Volume 15, Number 27 Jul 20, 2011
The Marine Environment Protection Committee (MEPC) of the UN International Maritime Organization (IMO) adopted mandatory measures to reduce emissions of greenhouse gases (GHGs) from international shipping, when it met last week at IMO Headquarters in London. This decision marks the first ever mandatory global greenhouse gas reduction regime for an international industry sector.

Tensions Build between EU, China over Rare Earths in Aftermath of Raw Materials Decision
Bridges Weekly Trade News Digest Volume 15, Number 27 Jul 20, 2011
China's recent announcement that it would further tighten its rare earths export quotas came as a surprise, given that the WTO found similar restrictions on raw materials to violate trade rules. Meanwhile, China is still debating whether to appeal the raw materials ruling, as the deadline for appeal is 2 September 2011.

Is a Sovereign Credit Event a Disaster?
Edwin M. Truman (PIIE) Jul 20, 2011
On both sides of the Atlantic, policymakers face sovereign credit events. If those events materialize, will the result be a disaster? Yes and no. Yes if the credit event occurs in the context of a failure by policymakers to address convincingly the underlying short-term and medium-term economic, financial, and political issues. No if the credit event occurs in the context of a convincing program to address those issues.

Preferential trade agreements and the WTO
Nadia Rocha & Robert Teh (VoxEU) Jul 21, 2011
Preferential trade agreements are now a prominent feature of the global trading system. This column describes current trends in preferential trade liberalisation and explores why deep integration is gaining momentum. It also proposes a number of options for increasing coherence between such agreements and the multilateral trading system.

Dynamics of Free Trade Agreements: Benefits and Strategic Considerations
Hyun Chong Kim (SERI Quarterly) Jul 21, 2011
With the multilateral WTO failing to meet expectations, Korea has turned to bilateral FTAs to increase trade with its partners. Such market opening, in contrast to fears of foreign dominance, has allowed Korean businesses to embrace global standards and improve their competitiveness. Korea's trade outlook will benefit from pursuing multiple FTAs with partner countries simultaneously.

Debt and Delusion
Robert J. Shiller (Project Syndicate) Jul 21, 2011
The fundamental problem for much of the world today is that investors are overreacting to debt-to-GDP ratios, fearful of some magic threshold, and demanding fiscal-austerity programs too soon. We should worry less about debt ratios and thresholds, and more about our inability to see these indicators for the often-irrelevant constructs that they are.

Pity the Policymakers
Mohamed A. El-Erian (Project Syndicate) Jul 21, 2011
Today’s Western policymakers face unusually difficult challenges with abnormally ineffective tools. But pity is not a free pass: We should demand that policymakers shift from their traditional cyclical mindset to one that comprehends and addresses the more complicated, yet critically important, structural issues that underlie today’s malaise.

Greek Debt and European Fiscal Union
David Mackie and Greg Fuzesi (WSJ) Jul 21, 2011
The European Central Bank's opposition to restructuring payment terms is odd--unless it has political motives.

An Accounting Perspective on Financial Globalization
Nicolas Véron (PIIE) Jul 21, 2011
Sometimes it takes a narrow lens to distinguish the true features of big objects. The future of financial globalization, whatever one's perspective on its dangers or merits, is one of the biggest questions of our times. By contrast, accounting is often perceived as a boring technique. But the policy debate on accounting and especially on International Financial Reporting Standards (IFRS), which are replacing local accounting standards in an increasing number of countries, entails large stakes and important lessons for global financial integration.

Swiss gold
Economist Jul 21, 2011
The paper currency that everyone seems to like.

Europe's debt crisis: Toward a Greek default
Economist Jul 21, 2011
As European leaders gather in Brussels to settle on a new plan to address Greece's debts and—they hope—the broader issue of market confidence in the euro zone, details of a potential deal are emerging.

India's economy: One more push
Economist Jul 21, 2011
Twenty years after India’s historic economic reforms, it’s time for another big effort.

Indonesia's middle class: Missing BRIC in the wall
Economist Jul 21, 2011
A consumer boom masks familiar problems in South-East Asia’s biggest economy.

TAA Reauthorization: Necessary and Appropriate
Greg Mastel and Howard F. Rosen (PIIE) Jul 21, 2011
Largely eclipsed in the debt-limit rancor, an acrimonious debate has sprung up over the Obama administration's intention to include an extension of Trade Adjustment Assistance (TAA)—a half-century old program that provides training and other assistance to workers who lose their jobs due to foreign competition—in the legislation implementing the US-Korea free trade agreement (FTA). Using grossly outdated information, critics have questioned the value of TAA, and, using a highly selective reading of history, the appropriateness of attaching its reauthorization to the FTA.

Spasm or spiral? The west’s choice
Philip Stephens (FT) Jul 21, 2011
For outsiders looking in on the crises facing Europe and the US, this is about more than economics – they see a failure of democracy.

We are on course to stop a new financial crisis
Barney Frank (FT) Jul 21, 2011
Critics say the Dodd-Frank act is disruptive but if it were not disruptive, it would not have been worth doing.

India bats its way up the new world order
Mihir Bose (FT) Jul 21, 2011
A private dinner in London for India’s newly rich and powerful elite was just the latest indication of how global power is shifting from west to east.

Middle-class uprising poses a global threat
John Paul Rathbone (FT) Jul 21, 2011
The greatest source of conflict today is not the clash of civilisations, or even the battles raged within them, but the changing fortunes of the global middle classes.

Toward Two European Monetary Unions
Alfred Steinherr (Globalist) Jul 21, 2011
Why does it make sense to divide the European Monetary Union into a Northern EMU and a Southern EMU?

Is France on Course to Bid Adieu to Globalization?
Pierre Haski (YaleGlobal) Jul 21, 2011
The French have long been critical of globalizing forces that disrupt their nation’s economy or threaten their identity. Calls for démondialisation, or deglobalization, has emerged as a leading issue in the French presidential campaign. Intense opposition to engagement with the world builds among the left and right, along with alarm about the global debt crisis, structural youth unemployment and a disturbing rise in inequality. Policy changes – including France distancing itself from European Union politics, as foreshadowed by its 2005 rejection of the European Constitutional Treaty – could be in store.

Post-Crisis, A New Mission for the IMF
Amity Shlaes and Ilan Kolet (Bloomberg) Jul 22, 2011
The IMF, discussed here this week, was key in preventing a much broader economic crisis after the financial turmoil of 2008. Year-to-date IMF credit outstanding, which measures active borrowing, among other things, has since increased to record levels. The fund has revamped its lending program and was able to quickly approve loans for countries in distress, most notably Greece and Ireland.

Double Currency
Geoffrey Hawthorn (LRB) Jul 22, 2011
The problem is plain. If new loans to Greece are arranged, even at lower rates of interest, its debt will rise. If its existing loans are rolled over or sold, the rating agencies may declare default and jittery banks and other investors will expect more interest on new lending. But the solution this week involves a degree of both, in the hope that the compromise will not be too unpalatable to too many. The alternatives – for Greece to default completely and leave the Eurozone or for the zone to announce that it will move to a common fiscal and spending policy – are next to unimaginable.

Look East, Russia
Sergei Karaganov (Project Syndicate) Jul 22, 2011
While Russia needs to integrate itself with Europe’s remaining islands of innovation (Germany, above all), it is the growth potential of the Asia-Pacific region that will determine the country’s future. But Russia has yet to devise a long-term and comprehensive Asian strategy.

The Too-Quiet American
Jagdish Bhagwati (Project Syndicate) Jul 22, 2011
It is now apparent that the US is the main culprit in preventing the ten-year-old multilateral trade negotiations known as the Doha Round from being closed this year. America’s rejectionist stance comes from the top of the US government, starting with President Barack Obama’s lack of leadership.

Bad Brussels Buffet
WSJ Jul 22, 2011
'Something for everyone' won't solve the euro-zone crisis.

Global: Shades of 2010
Manoj Pradhan (MS GEF) Jul 22, 2011
If our base case plays out, the next move in policy rates in the DM as well as EM world could be higher.

Some Sense in Europe
NYT Jul 22, 2011
The European Union leaders have finally approved a bailout loan for Greece and others, but the economic crisis is far from over.

In Africa, Wealth Breeds Rage
John Githongo (NYT) Jul 23, 2011
African economies are growing, but so is inequality. Huge disparities in wealth may take the Arab Spring south.

Greece through the rear-view mirror
Domingo Cavallo & Miranda Xafa (VoxEU) Jul 23, 2011
Thursday's EU summit in Brussels announced new plans for tackling the Eurozone crisis. This column says that the agreement reached on a new financing package for Greece, including some debt relief, will not reduce Greece's debt to sustainable levels. It suggests additional financial support contingent on larger haircuts.

From lender of last resort to global currency? Sterling lessons for the dollar
Marc Flandreau & Stefano Ugolini (VoxEU) Jul 23, 2011
Has the global financial crisis been bad news for the world’s reserve currency? This column argues that it needn’t be, citing the rise of sterling as a global currency after the financial crisis of 1866.

Credit Ratings Retreat
WSJ Jul 23, 2011
Regulators shrink from reforming the ratings cartel.

Money blindness
Reuven Brenner (AT) Jul 23, 2011
The failure of the US Federal Reserve and other central banks to recognize appropriately the varying forms of "money" in the economy has led to a fatal mispricing of credit. Until that changes, there will be nothing to force the new generation to absorb the lessons of past mistakes.

Beggars and choosers
Chan Akya (AT) Jul 23, 2011
The European Union, like a well-meaning passer-by handing out coins to beggars, has thrown more cash at Greece, blind to the truth of what is involved. Markets, with an eye on Spain and Italy, will test the claim that this is the "first and only" such deal, and the core Greek solvency problem remains unresolved.

Staff of life, bread of death
Christian Parenti (AT) Jul 23, 2011
The global food system is straining under the intense pressure of rising demand, rising energy prices, growing water shortages and the onset of climate chaos. This, experts tell us, is only the beginning. The price of bread is forecast to nearly double in the next 20 years, bringing more Arab-style protests, and heightened conflict and imperialist intervention.

How to fight malaria by slashing “killer tariffs"
Lucian Cernat (VoxEU) Jul 24, 2011
Malaria is still a public-health nightmare in many African countries. This column argues for greater coherence between trade, foreign investment, and other malaria-related policy initiatives. In particular, technical assistance should prioritise the removal of "killer tariffs" on mosquito nets.

The eurozone crisis is on pause, not over
Wolfgang Münchau (FT) Jul 24, 2011
The recent deal to ease the eurozone crisis was a compromise that works politically, but it comes at the expense of debt sustainability

Britain wants tighter eurozone – without Britain
George Parker (FT) Jul 24, 2011
How will Cameron know what the eurozone leaders are discussing if he isn’t in the room?

The Perverse Politics of Financial Crisis
Luigi Zingales (Project Syndicate) Jul 25, 2011
In trying to understand the pattern and timing of government interventions during a financial crisis, we should probably conclude that, to paraphrase the French philosopher Blaise Pascal, politics have incentives that economics cannot understand. Unfortunately, those incentives also often bring about crises in the first place.

The Future of Economic Growth
Dani Rodrik (Project Syndicate) Jul 25, 2011
Greater convergence in the post-crisis global economy – a narrowing of the income gap between rich and poor countries – appears inevitable. But a large reversal in these countries' fortunes seems neither economically likely, nor politically feasible.

You’ve ousted an Arab autocrat. Now what?
Claire Spencer (FT) Jul 25, 2011
Cleaning out the parties is the difference between a revolution that succeeds in entrenching real freedoms and one that is just a limited, elite-level coup d’état.

Like Esperanto, Greek bail-out is a bit of a fudge
Patrick Jenkins (FT) Jul 25, 2011
Rivalries, point-scoring politicians and self-interested banks have distracted everyone from sorting out the euro mess.

Policymakers must reduce reliance on credit ratings
Deven Sharma (FT) Jul 25, 2011
Rating providers do not seek to be at the heart of policy decisions.

Bank competition and stability: Cross-country heterogeneity
Thorsten Beck, Olivier De Jonghe & Glenn Schepens (VoxEU) Jul 25, 2011
Bank stability and economic stability are intimately linked – as the last few years can attest. This column finds that the market, regulatory, and institutional framework in which banks operate has a significant impact on the relationship between bank competition and fragility, with widespread implications for the broader economy.

China's European Shopping Spree?
Mark Blyth (FA) Jul 25, 2011
The EU agreement to refinance Greece's debt may have calmed the markets, but ongoing austerity measures across Europe are leave open potentially worrying side effect that policymakers have yet to address: the chance for China to buy sensitive assets at fire-sale prices.

IMF Continues Push Toward Enhanced Global Financial Safety Net
IMF Survey Jul 25, 2011
New research by IMF staff outlines options—including an enhanced global financial safety net—to address crisis risks from the increasingly complex financial and economic links between countries and markets. The analysis identifies and focuses on four systemic crises since 1980.

Europe’s Southern Future
Elisabeth Guigou (Project Syndicate) Jul 26, 2011
Asia revolves around ASEAN, and the Americas around NAFTA and Mercosur. Europe, too, needs to help organize a large hemispheric region, and it should start with a Euro-Mediterranean community.

Greek tragedy
Hans-Werner Sinn (VoxEU) Jul 26, 2011
The Eurozone crisis is far from over. Greece still needs substantial reforms if it is to regain competitiveness and survive without support. This column argues that the pain of doing so will be unbearable for Greek society. It claims that the best solution for all concerned is if Greece temporarily leaves the euro.

Did global imbalances cause the financial crisis?
Claudio Borio & Piti Disyatat (VoxEU) Jul 26, 2011
Global imbalances loom large in G20 and IMF discussions, but are they to blame for the global crisis? This column argues that the emphasis on current-account imbalances is unhelpful and diverts attention from the monetary and financial factors that really sowed the seeds of the crisis.

How does sovereign risk affect bank funding conditions? What can policymakers do?
Michael Davies & Fabio Panetta (VoxEU) Jul 26, 2011
Sovereign credit risk has emerged as the main challenge to global financial stability. This column explains how a deterioration in sovereign creditworthiness can damage bank funding conditions before discussing possible options for mitigating these effects. It argues that banks can only do so much and that the policymakers have a critical role.

Three Ways to Unlock Strong, Stable, Balanced Growth
IMF Survey Jul 26, 2011
Three major challenges—sovereign debt, growth, and social instability—currently confront the world economy, IMF Managing Director Christine Lagarde tells a New York City audience. These challenges are intimately intertwined, and only by solving all three can the world unlock strong, stable, and balanced global growth.

With US on the Brink of Default, Eyes are on Rating Agencies
David Dapice (YaleGlobal) Jul 26, 2011
Despite credit-rating agencies' past failures and suspicion of collusion, investors have nowhere to turn

A double act of self-inflicted crises
Alan Beattie (FT) Jul 26, 2011
All functional politics may be alike, but each dysfunctional government, US or European, is dysfunctional in its own way.

Kipling’s game theory lessons for Greece
John Kay (FT) Jul 26, 2011
As in the dollar bill auction, so it is in business, politics and finance: the underbidder always comes back.

The shaky basis of the Greek rescue
Peter Spiegel (FT) Jul 26, 2011
Did the eurozone’s presidents and prime ministers understand the Greek rescue package they signed up to?

Mood change will hurt US global bank stocks
Richard Bernstein (FT) Jul 26, 2011
The political environment suggests investors should expect underperformance from financial stocks over the next several years.

instein on Wall Street, Time-Money Continuum
Mark Buchanan (Bloomberg) Jul 27, 2011
What is the value of time? This question was once a matter for philosophers such as Plato or Aristotle. Today economists claim to know the answer. The future, they say, is “discounted” because the value of having something or some amount of cash is greater than the value of having that same thing or amount of money a year from now.

Who Elected the Rating Agencies?
Holman Jenkins (WSJ) Jul 27, 2011
Kibitzers help turn an artificial crisis into a real one.

Is South Africa keeping pace with the BRIC's increasing footprint in Subsaharan Africa?
Marion Mühlberger & Lutz Sager (DB Research) Jul 27, 2011
Recently, much attention has been paid to the increasing African footprint of the BRIC economies. But what about Africa’s largest economy? Is South Africa losing its stake in the Sub-Saharan African economic renaissance to China and other BRICs?

China’s Inflation Muddle
Yu Yongding (Project Syndicate) Jul 27, 2011
Even as the debt crises in Europe and the US loom large and the global economic recovery falters, inflation is making a comeback. Indeed, emerging-market economies are bracing for a serious bout of it – and bout that China is already fighting.

A Greek Catch-22
Eduardo Levy Yeyati (Project Syndicate) Jul 27, 2011
A recurrent characteristic of Europe’s debt-crisis debate is a Latin American precedent. But, while many highly indebted Latin American countries conducted debt buybacks in the late 1980’s the most relevant experience with debt buybacks is a more recent and far less studied case: Ecuador in 2008.

Read China’s Lips
Stephen S. Roach (Project Syndicate) Jul 27, 2011
Chinese admire America’s economic dynamism, but they have lost confidence in the US government and its dysfunctional economic stewardship. The debate over the debt ceiling and the budget deficit is the last straw, and China's own shift away from export-led growth implies an end to its limitless demand for US government securities.

Eurozone bailout: Taxpayer transfer to the wealthy?
Harald Hau (VoxEU) Jul 27, 2011
Last week, the European heads of government added €109 billion to the existing €110 billion rescue plan for Greece. As Europe’s financial sector would have otherwise taken a huge hit, this column address the question: How did the financial sector manage to negotiate such a gigantic wealth transfer from the Eurozone taxpayer and the IMF to the richest 5% of people in the world?

Credit constraints and the great trade collapse
Daniel Paravisini, Veronica E Rappoport, Philipp Schnabl & Daniel Wolfenzon (VoxEU) Jul 27, 2011
On the back of the global crisis came the global trade collapse, as international trade fell 15% between 2008 and 2009. Was this a result of credit lines being cut or did demand simply disappear? This column uses Peruvian export data to argue that bank credit played a smaller role than suggested by previous estimates.

India's Inflation Mystery
Arvind Subramanian (PIIE/Business Standard) Jul 27, 2011
Keeping inflation low and stable has been one of India's major policy successes. On the strength of this achievement, the Reserve Bank of India (RBI) could pride itself as one of the better-run public institutions in the country. But conducting monetary policy was among the easier jobs in India. In some ways, RBI had little choice but to deliver macroeconomic stability because of the propitious political economy of inflation. The politically assertive middle class has had low inflation tolerance, with 5 percent considered the threshold --or Lakshman rekha --beyond which the clamor for action, never constrained by apathy or acquiescence, becomes difficult to ignore. RBI's policy merely reflected an unavoidable respect for the inflation preference of key voters.

The Myth of Diversification: Risk Factors versus Asset Classes
Sébastien Page and Mark A. Taborsky (PIMCO) Jul 27, 2011
Diversification often disappears when you need it most.

Asia’s BRICs Hit the Wall
Jaswant Singh (Project Syndicate) Jul 28, 2011
China and India have used very different political models to achieve their GDP growth targets. Nonetheless, as their economies mature, both will need to embrace structural change – and to address the challenges of overdue political reforms.

The Storm after the Calm
Michel Rocard (Project Syndicate) Jul 28, 2011
Could the financial crisis of 2007-2008 happen again? Since the crisis erupted, there has been no shortage of opportunities – in the form of inadequate conclusions and decisions by officials – to nurture one’s anxiety about that prospect.

Europe’s Last Taboos
Jean Pisani-Ferry (Project Syndicate) Jul 28, 2011
Once again, the unthinkable has become necessary in Europe. But, while the pretense that Greece was solvent has been jettisoned, have the last taboos been broken, or will others – say, the reintroduction of a national currency or, conversely, the introduction of Eurobonds – fall as well?

An accounting perspective on financial globalisation
Nicolas Véron (VoxEU) Jul 28, 2011
Transparency in accounting standards is essential for global financial integration. Yet when the concepts are so complicated and the financial stakes so high, the debate is ripe for capture by special interests. This column suggests ways to stop this, drawing lessons from the debate over International Financial Reporting Standards.

Preferential trade agreements: The Swiss Army knife of trade policy?
Jean-Pierre Chauffour & Jean-Christophe Maur (VoxEU) Jul 28, 2011
With the Doha Round of multilateral negotiations stuck in a rut, this column argues that preferential trade agreements may provide the necessary versatility to navigate the next frontier of trade liberalisation.

Beware of perceived safe havens
Richard Milne (FT) Jul 28, 2011
By favouring triple A government debt, regulators are increasing the risks throughout the financial system and in sovereign bonds.

Troubled State of Doha Talks Causing WTO "Paralysis," Says Lamy; Focus for December Ministerial Shifts
Bridges Weekly Trade News Digest Volume 15, Number 28 Jul 28, 2011
The embattled Doha Round of trade talks took another twist this week, as WTO members acknowledged that the Doha mini-package that they have been working toward since late May is no longer looking plausible for this year's December ministerial. As the WTO breaks for its August recess, minds have forcibly turned to a pro-active quest for credible pathways away from the repeated setbacks in resolving the ten-year negotiations.

Mandate on TK, Genetic Resources, Cultural Expression to be Extended: WIPO
Bridges Weekly Trade News Digest Volume 15, Number 28 Jul 28, 2011
Members of the committee that negotiates genetic resources and related subjects at the World Intellectual Property Organization (WIPO) have agreed to recommend the renewal of their mandate, which is set to expire this year. The recommendation, which was drafted at the 18-22 July meeting of the WIPO Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore (IGC), will be submitted to WIPO's General Assembly (GA) in late September for formal adoption.

Passage of US FTAs Likely Delayed until after August Recess, with Possible Way Forward in Sight
Bridges Weekly Trade News Digest Volume 15, Number 28 Jul 28, 2011
The beleaguered process of ratifying the US trade pacts with Colombia, Panama, and South Korea is unlikely to conclude before the US Congress goes on its August recess next week, as Republicans and Democrats continue sparring over worker aid and the federal debt limit. However, talks of a compromise have begun to emerge for the passage of both these FTAs and the worker aid programme when Congress returns in September.

Food Access Key as Horn of Africa Crisis Worsens, Say Agencies
Bridges Weekly Trade News Digest Volume 15, Number 28 Jul 28, 2011
The UN has officially declared a famine in parts of Somalia, as the food crisis in the Horn of Africa continues to worsen. Aid agencies are warning that allowing food to move freely in.

Why is America’s Budget Deficit So Large?
Martin Feldstein (Project Syndicate) Jul 28, 2011
America’s enormous budget deficit is now exceeded as a share of national income only by Greece and Egypt among all of the world’s major countries. And the economic downturn since 2008 is only part of the reason.

The Euro-American Debt Dilemma
Michael Boskin (Project Syndicate) Jul 28, 2011
The debt dilemmas in Europe and the US prove yet again that elected officials will ignore long-run costs to achieve short-run benefits, and will act only when forced. And that implies an extended period of episodic economic disruption and political upheaval far beyond this summer’s debates on America’s debt ceiling and Europe’s distressed sovereign debtors.

Eurozone Leaders are Fighting Contagion, But is it Too Little, Too Late?
Andrew Balls (PIMCO/Forbes) Jul 28, 2011
The impact of the announcement on the expanded role of the European Financial Stability Facility would have had a greater impact if it had been made before the bout of contagion to Italy, rather than in a reaction to that worrying development. The recent brutal market action will have done lasting damage in terms of the perceptions of volatility and credit risk inherent in holding Italian government debt. The eurozone leaders have signaled their preferred approach. They now need to deliver on implementation, including parliamentary approval for the necessary changes to the European Financial Stability Facility.

Debt Burden in Advanced Economies Now a Global Threat
Eswar Prasad & Mengjie Ding (Brookings) Jul 28, 2011
Our analysis paints a sobering picture of worsening public debt dynamics and a sharply rising debt burden in advanced economies. These rising debt levels combined with heightened concerns about fiscal solvency now constitute a major threat to global financial stability.

Our plan will rescue Greece and protect Europe
François Baroin and Wolfgang Schäuble (FT) Jul 28, 2011
The public and private sector now have to act hand in hand to support Greece’s reform programme.

The euro is still far from out of danger
Samuel Brittan (FT) Jul 28, 2011
After the latest Greek rescue, the chances of a federal solution are much higher – but muddling through is still in the lead.

Political lethargy tarnishes India’s lustre
Rahul Jacob (FT) Jul 28, 2011
India’s entrepreneurial energies may have been unleashed by Manmohan Singh’s budgets of 1991 and 1992, but he has failed to change the legendary lethargy of its government.

Europe and the Twisted Benefits of Rating Agencies
Stephan Richter (Globalist) Jul 28, 2011
Why can rating agencies do more to improve the financial health of countries than anything else?

Could a U.S. Debt Downgrade Trigger a Financial Crisis?
Neel Kashkari (WP) Jul 29, 2011
As we approach Treasury’s debt-ceiling deadline, attention has shifted from the risks of a default on Treasury debt to the risk of a downgrade of U.S. credit. Many are asking whether a downgrade could itself lead to a financial crisis. With the example of 2008 still fresh in many minds, the question has become: Would it be as bad as the Lehman Bros. bankruptcy?

Emerging Markets: Contagion from trouble in the eurozone has not been widespread. Will it remain like this?
Maria Laura Lanzeni (DB Research) Jul 29, 2011
During the current episode of trouble in the eurozone, emerging markets have fared better than in the spring of 2010, which was in turn better than during the Lehman episode. Perhaps the eurozone crisis has not been deemed “systemic” so far, which would certainly change if Spain and/or Italy went the Greek way (not to mention in the case of a full-blown US crisis). Indeed, the correlation of EM and Spanish CDS spreads is much higher and spreads across many more countries than in a similar comparison with Greece. Looking at “fundamental” contagion factors, Central and South-Eastern European countries look most vulnerable to further deterioration in Greece, while some Latin American countries are very exposed to Spain via the bank channel.

How much will the new Greek bailout cost private bondholders?
Ricardo Cabral (VoxEU) Jul 29, 2011
On 21 July 2011, the Council of the EU agreed to a second bailout for Greece. The deal was predicated on “private-sector involvement”. This column explores what this actually means. It estimates that the haircut for private bondholders may well be one-third of the figure initially proposed. It stresses that such uncertainties could spell more trouble for Greece and Europe as a whole.

Poultry in motion: Trade finance in the frozen-food industry
Pol Antràs & C Fritz Foley (VoxEU) Jul 29, 2011
International trade flat-lined in the immediate aftermath of the global crisis, and many practitioners suggested that trade finance played an important role. Yet research has lagged behind policymaking, largely due to a lack of data detailing the financing of international transactions. This columns explores a US poultry exporter's trade-finance practices to pluck out some policy recommendations.

Global: The Lasting Legacy of Leverage
Spyros Andreopoulos (MS GEF) Jul 29, 2011
Household (and public) indebtedness should be a constraint to interest rate-setting going forward.

The Big Mac index: Fast food for thought
Economist Jul 30, 2011
What do hamburgers, lipstick and men’s underwear have in common? The joys of quirky economic indicators

How much difference will the EU’s new approach to preferential trade make?
Michael Gasiorek & Javier López González (VoxEU) Jul 30, 2011
The EU is redesigning its rules on preferential trade access for developing and emerging economies. This column outlines the likely winners and losers and argues that in order to help developing countries integrate into the world economy much more creative policies are needed.

Happiness economics: Can we have an economy of wellbeing?
Carol Graham (VoxEU) Jul 31, 2011
The UK government is the latest to consider incorporating measures of happiness in its policymaking. This column takes stock of what we know from investigations into people’s wellbeing. It concludes that there is still much to resolve before a measure of gross national happiness is possible – or indeed desirable.

Europe’s Sovereignty Crisis
Joschka Fischer (Project Syndicate) Jul 31, 2011
More than ever, the EU must combine greater stability, financial transfers, and mutual solidarity in order to avoid collapsing under the weight of the ongoing sovereign-debt crisis. If EU member states' leaders do not even try, their defeat – and that of Europe – is certain.

Famine and Hope in the Horn of Africa
Jeffrey D. Sachs (Project Syndicate) Jul 31, 2011
Once more, famine stalks the Horn of Africa, where more than ten million people are fighting for survival, mainly pastoralist communities in the hyper-arid regions of Somalia, Ethiopia, and northern Kenya. But the current crisis could yet mark the start of regional recovery and development.

Low Bank Capital Is Next Fiscal Crisis
Simon Johnson (Bloomberg) Jul 31, 2011
The summer debate that has dominated Washington seems straightforward. Under what conditions should the U.S. government be allowed to borrow more money? The numbers that have been bandied about focus on reducing the cumulative deficit projection over the next 10 years, as measured by the Congressional Budget Office. But there is a serious drawback to this measure because it ignores what will probably prove to be the U.S.’s single largest fiscal problem over the next decade: The lack of adequate capital buffers at banks.

An uncomfortable final stretch for Trichet
Ralph Atkins (FT) Jul 31, 2011
Agreeing that an attempt at an orderly Greek debt restructuring could go ahead has not helped the credibility of the ECB chief.

Bleak realism is no way to run a company
Paul Collier (FT) Jul 31, 2011
Greed and fear have shaped Anglo-American companies, but they bring both inefficiency and inequality.

Why Global Debt Dramas Recur
Mohamed A. El-Erian (PIMCO/Reuters) Jul 31, 2011
Most of us wish to put the serious sovereign debt and deficit issues behind us. Unfortunately this is not possible due to continued challenges brought about by ongoing de-levering requirements – especially in peripheral Europe, but also, though less severely, in the U.S. The challenge is, critically, to safely de-lever. The best way to do so is through high levels of economic growth. Yet this option is undermined today by the bumpy journey to a new normal, and is aggravated by the lack of structural policy measures to remove impediments to economic growth. Neither Europe nor America can sustain the sort of economic recovery that would make a meaningful dent in their debt dynamics. As a result, different governments are opting for different approaches, including harsh austerity, financial repression and, in one case, a potential debt restructuring. De-levering pressures will be with us for years, and governments will mix and match from the menu of options. Accordingly, periodic debt dramas will recur. And we all need to understand the dynamics and the likely choices governments will make going forward.