News & Commentary:

August 2012 Archives


Will Japan Regain Its Greatness?
Michael Shari (Global Finance) Aug 1, 2012
Business is trying to resurrect Asia's economic miracle a year and a half after the Tohoku tragedy.

Mario Draghi’s Guns of August
Kemal Dervis (Project Syndicate) Aug 1, 2012
August has been a dangerous month in European history, but this year it could be the turning point for the eurozone – and perhaps for the world economy. That depends on whether – and how – the European Central Bank makes good on official pledges to do “whatever it takes” to preserve the euro.

Trans-Pacific Partnership enlarged: A trade agreement that may remake world trade governance
Claude Barfield (VoxEU) Aug 1, 2012
Canada and Mexico have recently been invited to join negotiations for the Trans-Pacific Partnership. This column argues this is a big deal. It could produce a domino effect, beginning with the addition of Japan and Korea and leading to a model 21st century trade area encompassing over 700 million people with a combined GDP of some $26 trillion.

Spillover effects in a fiscal union: Evidence from the US
Rabah Arezki, Bertrand Candelon & Amadou Sy (VoxEU) Aug 1, 2012
What are the spillover effects within a fiscal union? This column looks at evidence within bond markets for individual US states and the market for US Treasury securities. Results are twofold. First, there are negative spillovers between most markets for individual US state bonds. Second, there is no substantial spillover effect between shocks originating from state securities and from federal markets, except for a few large issuers.

Fantasies of power in muddle-along India Financial Times Subscription Required
Ramachandra Guha (FT) Aug 1, 2012
The degradation of state institutions is the most serious threat to the long-term success of India’s ‘growth story’.

Brace for an era of crisis aftershocks Financial Times Subscription Required
David Rosenberg (FT) Aug 1, 2012
The ‘great recession’ may have ended three years ago but the scars caused by the bursting of the housing and credit bubbles have yet to heal.

Strong Yen Is Dividing Generations in Japan New York Times Subscription Required
Martin Fackler (NYT) Aug 1, 2012
The rapidly expanding number of Japanese retirees benefit from the currency's rise, but it has made the country's exports expensive abroad.

Capital market bank funding: (Not such a) brave new world Adobe Acrobat Required
Meta Zähres (DB Research) Aug 2, 2012
Since the financial crisis erupted there have been significant changes in the market conditions for banks. The years preceding the crisis were marked by more market-based bank funding, a rapid expansion in the securitisation market, low interest rates and high liquidity, whereas today the market environment is being shaped by strong risk aversion and severely restricted access to the capital market, especially in the case of securitisations. The market for unsecured bank bonds also continues to be fraught with major uncertainty. As long-term trends, many of the changes that have shaped the funding landscape since the crisis began will be lasting impediments to bank financing: bank bonds will be perceived as more risky in future; capital market funding will become more costly for banks on a sustained basis.

Now for a dose of Draghi’s monetary medicine Financial Times Subscription Required
Stephen King (FT) Aug 2, 2012
Even if Mario Draghi has correctly identified the nature of his monetary problem, that won’t be enough to solve the eurozone’s difficulties.

Anthropologists join actuaries to teach us all about risk Financial Times Subscription Required
Gillian Tett (FT) Aug 2, 2012
When anthropologists joined actuaries to discuss the cultural assumptions that shape risk modelling, the results were thought-provoking.

Chevron bets on the ‘Goldilocks’ of gas Financial Times Subscription Required
Guy Chazan (FT) Aug 2, 2012
Group eyes shale’s next frontier but will need to convince millions of sceptical Slavs that they have nothing to fear from fracking.

Is lending by state banks more stable over the business cycle?
Ata Can Bertay, Asli Demirgüç-Kunt & Harry Huizinga (VoxEU) Aug 2, 2012
Bank bonuses may not have changed much in the last few years, but their owners have. This column asks whether government-owned banks may bring stability to the supply of credit over the business cycle and especially at a time of financial crisis.

Can India’s Power Problems Be Solved?
Arvind Subramanian (PIIE) Aug 2, 2012
In Lord Richard Attenborough’s movie Gandhi, an underling of the British Empire heatedly warns his supercilious boss that Mahatma Gandhi’s impending protest march to the sea poses a far greater threat than the Raj realizes: “Salt, sir, is a symbol.” This elicits the memorable sneering put-down from the boss (played by Sir John Gielgud): “Don’t patronize me, Charles.”

The Benefits of Chinese FDI
Laura Tyson (Project Syndicate) Aug 2, 2012
China’s businesses have been encouraged to “go global” and invest abroad to upgrade their technology and management, find new growth opportunities, and move up the value chain. Recipient countries, including the US, have little to fear from Chinese FDI – and much to gain.

Winning the $30 trillion decathlon
Yuval Atsmon, Peter Child, Richard Dobbs, and Laxman Narasimhan (McKinsey Quarterly) Aug 2, 2012
By 2025, annual consumption in emerging markets will reach $30 trillion—the biggest growth opportunity in the history of capitalism. To compete for the prize, companies must master ten key disciplines.

Central Banks Can't Save the World
Mohamed El-Erian (Bloomberg) Aug 2, 2012
The three central bank meetings this week -- the Bank of England, the European Central Bank and the Federal Reserve -- made very good cases for additional stimulus measures, though they failed to specify what these would be.

The Dark of Knight Wall Street Journal Subscription Required
WSJ Aug 2, 2012
Wall Street trading glitches aren't caused by a lack of rules.

A Market Alternative to Libor Wall Street Journal Subscription Required
Daniel L. Doctoroff (WSJ) Aug 2, 2012
How the private sector can build a more accurate, transparent and impartial interest-rate benchmark.

What Happened to Europe?
Amartya Sen (New Republic) Aug 2, 2012
Democracy and the decisions of bankers.

China's Biggest Problems Are Political, Not Economic Wall Street Journal Subscription Required
Martin Feldstein (WSJ) Aug 2, 2012
Beijing seems to have avoided a growth 'hard landing,' but corruption, skewed birth rates and inequality will challenge the next leaders.

The Maana Bankers New York Times Subscription Required
NYT Aug 2, 2012
While the Federal Reserve and the European Central Bank put off until tomorrow what they should do today, the global economy is slowing.

Why Eurobonds are Un-American
Daniel Gros (Project Syndicate) Aug 3, 2012
Eurobonds are now widely assumed to be the only way out of the euro crisis, and supporters frequently cite the early years of the US, when Alexander Hamilton pressed the new federal government to assume states' Revolutionary War debts. But this experience provides neither a useful analogy nor an encouraging precedent for Europe.

Harold James (Project Syndicate) Aug 3, 2012
In the Bavarian State Opera's recent production of Richard Wagner's apocalyptic Götterdämmerung, the doomed characters held onto a rocking horse in the form of a large golden euro symbol. Revealingly, the most charismatic singer on stage was not from Europe.

One Money, (Too) Many Markets
Hans-Helmut Kotz (Project Syndicate) Aug 3, 2012
The euro was not created for purely economic reasons. If it is deemed a worthwhile project for political reasons, and is viewed as mutually beneficial to all participants, the eurozone could be made a viable venture – though certain minimal structural conditions must be met.

Bond Traders Deal in High Expectations, and Fear New York Times Subscription Required
Katrin Bennhold (NYT) Aug 3, 2012
Traders, admittedly unsure at times, know their decisions can have an outsize effect on economic policy.

The fiscal cost of trade liberalisation
Julia Cagé & Lucie Gadenne (VoxEU) Aug 4, 2012
One negative side-effect of trade liberalisation that has often been underplayed is the fiscal aspect. This column provides evidence from 110 trade-liberalisation episodes that tariff cuts lead to lower tax revenues as a share of GDP. The drop is highest in poor countries that don’t have the capacity to compensate for lost tariff revenues with domestic taxes.

Charlemagne: Une rentrée chaude
Economist Aug 4, 2012
Euro-zone leaders are hoping for a quietish August. But the autumn will bring storms.

The global crash: Japanese lessons Economist Subscription Required
Economist Aug 4, 2012
After five years of crisis, the euro area risks Japanese-style economic stagnation.

Government bonds and their investors: What are the facts and do they matter?
Jochen Andritzky (VoxEU) Aug 5, 2012
Public debt held by non-residents has been on the rise over the last few decades – that is until the global crisis. This column looks at how the ownership of government bonds in the G20 and the Eurozone. It finds that increased foreign bondholders bring costs as well as benefits.

Mario Draghi Cannot Save the Euro
Simon Johnson (Bloomberg) Aug 5, 2012
European Central Bank President Mario Draghi has been making pronouncements that many have interpreted as positive for the future of the euro. I think his words mean things are going to get ugly.

Powerless to act Financial Times Subscription Required
Henny Sender and James Crabtree (FT) Aug 5, 2012
Blackouts in the country of 1.2bn expose a profound systemic crisis involving banks and energy providers that has become New Delhi’s most urgent priority

Reform by stealth is reason for optimism about China Financial Times Subscription Required
Eswar Prasad (FT) Aug 5, 2012
Recent political turmoil, including the Bo Xilai affair, put reactionary forces in the Communist party on the defensive.

Cyber finance takes its collateral thinking test Financial Times Subscription Required
Gillian Tett (FT) Aug 5, 2012
There has been a shift away from the idea that financial transactions need to be secured on tangible assets.

Romney Is Right on Culture and the Wealth of Nations Wall Street Journal Subscription Required
Richard Landes (WSJ) Aug 5, 2012
A 2002 United Nations report written by Arab intellectuals acknowledges the problems the Republican candidate pointed out.

From Resource Curse to Blessing
Joseph E. Stiglitz (Project Syndicate) Aug 6, 2012
New discoveries of natural resources in several African countries – including Ghana, Uganda, Tanzania, and Mozambique – raise an important question: Will these windfalls be a blessing that brings prosperity and hope, or a political and economic curse, as has been the case in so many countries?

Europe’s Crisis of Tongues
Edoardo Campanella (Project Syndicate) Aug 6, 2012
The EU’s founders believed that a lingua franca would emerge through economic and social interaction. But they were wrong: to strengthen the euro and establish the foundations for a political union, European leaders should undertake a rapid and explicit process of linguistic integration.

The backlash against the rich has gone global Financial Times Subscription Required
Gideon Rachman (FT) Aug 6, 2012
Any government that raises taxes too far is in danger of sparking a flight of capital and business. The super-rich are mobile and well-advised.

India must harness the profit motive in the spirit of Nehru Financial Times Subscription Required
Jayant Sinha and Ashutosh Varshney (FT) Aug 6, 2012
Policy must aim to unshackle India’s entrepreneurial energies, reduce graft and develop an efficient welfare state.

Draghi and friends just want your money Financial Times Subscription Required
Bill Gross (FT) Aug 6, 2012
The EU needs private sector investors but they are balking and the EU must rebuild trust if it is to secure their involvement.

In Euro Crisis, Every Player Has His Own Agenda New York Times Subscription Required
Reuters/NYT Aug 6, 2012
Each of the main protagonists---the European Central Bank, the countries under pressure, Germany, and the governments already bailed out---is angling for others to make the first move.

How Google Can Avert the Next Financial Crisis
Mark Buchanan (Bloomberg) Aug 6, 2012
The mathematical insight that turned Google Inc. into a multibillion-dollar company has the potential to help the world avert the next financial crisis. If only banks made public the data required to do the job.

A Second Wave of Capital Flight Reaches Eurozone Core
Thomas Kressin (PIMCO) Aug 7, 2012
The falling euro is a sign that the eurozone is experiencing a net outflow of capital. During the first phase of the euro crisis, private capital flowed out of the “peripheral” countries to the core of the eurozone, but this shift had no adverse impact on the euro. Now, investors are taking their capital out of the eurozone altogether. The euro threatens to fall further, possibly leading to serious concerns about a devaluation spiral.

What Money Can Buy
Raghuram Rajan (Project Syndicate) Aug 7, 2012
In an interesting recent book, the Harvard philosopher Michael Sandel points to the range of things that money can buy in modern societies and gently tries to stoke our outrage at the market’s growing dominance. Is he right that we should be alarmed?

How Long for Low Rates?
Kenneth Rogoff (Project Syndicate) Aug 7, 2012
Global investors are apparently willing to accept extraordinarily low interest rates, even though they do not appear to compensate for expected inflation. But, while interest rates could fall still further, over the longer term this situation is not stable – and could unwind rapidly.

Bank behaviour and risks in an interbank payment system after a major credit event
Evangelos Benos, Rod Garratt & Peter Zimmerman (VoxEU) Aug 7, 2012
How does a major credit event such as the failure of Lehman Brothers on 15 September 2008 influence the way banks send and receive payments to and from one another? And what are the associated risks and costs?

The Procyclicalists: Fiscal austerity vs. stimulus
Jeffrey Frankel (VoxEU) Aug 7, 2012
Is austerity good or bad? This column argues that it is as foolish to argue this question as it would be to debate whether it is better to drive on the left or right. Procyclical fiscal policy, on the other hand, is another question.

7 Reasons to Expect US Manufacturing Resurgence
Farok J. Contractor (YaleGlobal) Aug 7, 2012
Lower wages, high productivity – despite disinterest in science – boost US manufacturing

Germany’s judgment day Financial Times Subscription Required
Quentin Peel (FT) Aug 7, 2012
Next month’s ruling on the legality of the eurozone rescue fund will prove decisive in the struggle to save the single currency.

This will not be enough, Mr Draghi Financial Times Subscription Required
Sebastian Mallaby (FT) Aug 7, 2012
The ECB has not shaken off its schizophrenia: it is bold when providing crisis loans to banks, less so when supporting sovereigns.

A lifeline is thrown to the periphery Financial Times Subscription Required
Lorenzo Bini Smaghi (FT) Aug 7, 2012
The ECB could already apply its new policy to Portugal and Ireland, which have a programme and are ‘on track’.

Cash out of gold and send kids to college Financial Times Subscription Required
Peter Tasker (FT) Aug 7, 2012
Everything has become somebody’s idea of an asset and gold has lost its special status as a store of value.

Brazil Gains in Reaching Out to Africa New York Times Subscription Required
Simon Romero (NYT) Aug 7, 2012
Brazil, which has more people of African descent than any other country outside of the continent itself, is raising its profile there again by building on ties from the Portuguese empire.

No More Growth Miracles
Dani Rodrik (Project Syndicate) Aug 8, 2012
A year ago, economic analysts were giddy with optimism about the prospects for economic growth around the developing world. Today, optimism has given way to doubt, and there is good reason to believe that growth will remain slow and difficult at best.

Decommission the weapons of trade warfare Financial Times Subscription Required
Alan Beattie (FT) Aug 8, 2012
One of the most important battles in trade is not between the US and China. It is between arbitrary import restrictions and th erules that restrain them.

European leaders must seize the day Financial Times Subscription Required
Jerome Booth (FT) Aug 8, 2012
Mario Draghi has regained some much-needed credibility for the European Central Bank; now governments must act to restore theirs

A Lesson in Crony Capitalism Wall Street Journal Subscription Required
Pierpaolo Barbieri (WSJ) Aug 8, 2012
As the U.S. gears up for an important presidential election, Argentina is a sad reminder of how crony capitalism is the enemy of genuine development.

America Needs a Business Pivot Toward Asia Wall Street Journal Subscription Required
Curtis Chin (WSJ) Aug 8, 2012
Economic engagement should augment military presence. Start with free trade agreements.

U.S. Seeks to Step Up Africa Investment New York Times Subscription Required
Lydia Polgreen (NYT) Aug 9, 2012
These days, Africa is widely seen as the next frontier for economic growth, and the United States must also contemplate growing political and security stakes on the continent.

Who Are Tomorrow’s Consumers?
Sanjeev Sanyal (Project Syndicate) Aug 9, 2012
While manufacturers of luxury goods have lately had a difficult time in emerging markets, the real story for the next two decades will be these countries’ shift to middle-class status. Although other emerging regions will undergo a similar shift, Asia will dominate this transformation.

China, Africa show lessons learnt with $20 bn pledge
Gavin du Venage (AT) Aug 9, 2012
China shows no indication of retreat from pouring money into African nations in the face of claims it represents a form of neo-imperialism. Even so, the latest US$20 billion loans pledge does come with signs of learning by both sides.

The hunger wars in our future
Michael T Klare (AT) Aug 9, 2012
As climate change wreaks agricultural havoc and the "Great Drought of 2012" in the United States, the social unrest and conflict to follow will bring the world closer to the dystopian, resource-scarce future envisioned in The Hunger Games. While that novel depicts gladiatorial designs to suppress a rebellion by the starving - in the real world they will number too many to defeat.

Rising regional inequality in China: Fact or artefact?
John Gibson & Chao Li (VoxEU) Aug 9, 2012
Many an economist will tell you they base their decisions on evidence. But what if the evidence is based on incorrect or irrelevant data? This column asks what this might mean for our view on regional inequality in China.

Europe’s Solidarity Imperative
Peter Sutherland (Project Syndicate) Aug 9, 2012
No one doubts that Germany and most other eurozone members would prefer the single currency to continue. The uncertainty is whether this preference may be overridden by pressing considerations of national politics, or resentment at the slow pace of reform in certain eurozone countries.

Environment: The end of the line Financial Times Subscription Required
Pilita Clark (FT) Aug 9, 2012
Many of the world’s best-known fish and whales are in danger of extinction and the industry risks economic collapse.

In old New York, we do it our way Financial Times Subscription Required
Gary Silverman (FT) Aug 9, 2012
The lesson for global bankers is that New York will probably never be as clubby a financial centre as London.

From Iraq to LIBOR: Excessive Risk-Taking and Democratic Accountability
Stephan Richter (Globalist) Aug 9, 2012
In recent decades, U.S. and British financial and foreign policy elites have displayed a strong penchant for taking excessive risks. The continuous slide of the United States and Britain into financialist democracies does not serve the very idea of democracy very well. Now, a fierce battle is getting underway over how to make things right.

Europe’s Summer Reading List
Barry Eichengreen (Project Syndicate) Aug 10, 2012
In August, Europe shuts down, on the assumption that nothing of consequence will happen until everyone returns, suitably tanned, in September. So, what should the continent's leaders, relaxing on southern Europe's crisis-ridden shores, be reading beneath their sun umbrellas this year?

What should India make? Economist Subscription Required
Economist Aug 11, 2012
The country is seeing a surge in manufacturing. But not in the way many hoped.

Standard Chartered: My dollar, my rules Economist Subscription Required
Economist Aug 11, 2012
American regulators threaten an emerging-markets bank.

The India-Brazil Axis
Ruchir Sharma (Globalist) Aug 11, 2012
There has been plenty of talk in recent years about the parallels and contrasts that mark the India-China relationship. Brazil — although half a world away — has many more real-life parallels to India than China does.

Pax Indica Financial Times Subscription Required
James Crabtree (FT) Aug 12, 2012
Shashi Tharoor offers an engaging guide to the issues on which India, as it takes the global stage, will have to pick sides.

Romania: A Balkan imbroglio Financial Times Subscription Required
Neil Buckley (FT) Aug 12, 2012
A power struggle in Bucharest has reignited debate about EU expansion and shone a light on the continuing grip of the former communist elite.

How We'll Build European Monetary Union 2.0 Wall Street Journal Subscription Required
Olli Rehn (WSJ) Aug 12, 2012
Europe is committed to building a genuine economic union to strengthen our existing monetary union.

Avoiding an Italian bailout: Why and how
Francesco Giavazzi (VoxEU) Aug 13, 2012
Spain looks set to turn to the EFSF for a formal bailout subject to stringent conditionality. In this column, Francesco Giavazzi – one of Europe’s leading macroeconomists and an advisor to the Monti government – argues that Italy’s situation is nothing like Spain’s. To avoid submitting itself to its EFSF conditionality, Italy should reduce its borrowing needs with a determined programme of public asset sales and bridge financing from the Cassa Depositi e Prestiti.

Africa’s Last Famine
Thierry Tanoh (Project Syndicate) Aug 13, 2012
Widespread famine in the Horn of Africa, one of the worst humanitarian tragedies of recent times, demands more than emergency assistance. Indeed, only if the agricultural sector’s fundamental inadequacies are addressed can the region truly escape famine’s blight.

Japan’s Fiscal Crisis Comes of Age
Yuriko Koike (Project Syndicate) Aug 13, 2012
The only reason that Japan has been able to sustain its fiscal position is that 93% of its debt is domestically held. But the large number of households formed by pensioners is growing larger still – and is increasingly drawing down savings that were mostly used to purchase government bonds.

Why Bad Politics = Even Worse Markets
Mohamed A. El-Erian (FP) Aug 13, 2012
Want to fix the economy? Stop the partisan brinkmanship.

Asia’s Role in the Post-Crisis Global Economy
Reuven Glick and Mark M. Spiegel (FRBSF Economic Letter) Aug 13, 2012
In the wake of the global financial crisis of 2007–08, Asia has emerged as a pillar of financial stability and economic growth. A recent San Francisco Federal Reserve Bank conference focused on Asia’s changing role in the global economy. Asia’s relative strength is allowing it to play an expanded part in multilateral responses to the European sovereign debt crisis. And the reforms put in place following the 1997 Asian financial crisis offer models for countries currently trying to stabilize their economies.

The food crisis should not be left to cowboy capitalists Financial Times Subscription Required
Jeremy Grantham (FT) Aug 13, 2012
Corn and soya price rises are evidence that we cannot sustainably feed a world population forecast to reach 10bn by 2050.

Risks must not hide positive China trends Financial Times Subscription Required
Gerard Lyons (FT) Aug 13, 2012
Three areas of concern stand out for the country: avoiding a hard landing; rebalancing the economy; and its institutional shortfalls

Tricky customers Financial Times Subscription Required
Louise Lucas (FT) Aug 13, 2012
Manufacturers are forced to consider afresh the way they make, package and distribute their goods as shoppers rethink habits.

Even Amid the Current Turmoil, Stocks Still Beat Bonds Wall Street Journal Subscription Required
Burton G. Malkiel (WSJ) Aug 13, 2012
Investors saving for retirement have no reason to fear day-to-day volatility.

ECB: No free lunch
Marco Annunziata (VoxEU) Aug 14, 2012
While markets have been cheered by recent ECB announcements on sovereign debt, some still question the Bank’s ability to save the euro. This column argues that the ECB is a lot stronger than many think. Linking ECB sovereign bond purchases to policy conditionality will ensure that reform efforts are sustained. The free lunch option has been ruled out – and that is a good thing.

Can Central Bankers Cope With the Crisis?
Henry Kaufman (Globalist) Aug 14, 2012
What sets the current financial crisis apart from past ones is not just the huge overhang of sovereign debt, but where it resides. Sovereign debt problems used to be confined mainly to the developing world. Now, they are endemic throughout the developed world.

Southeast Asian companies look abroad Financial Times Subscription Required
Jeremy Grant (FT) Aug 14, 2012
European companies are struggling to compete with expanding Asian groups who can boast strong balance sheets and large net cash piles.

ECB is right to ask for more eurozone action Financial Times Subscription Required
Robert Rubin (FT) Aug 14, 2012
A bond buying programme that does not require policy changes would contribute nothing to addressing the eurozone crisis.

Financial crisis cultivates identity crisis Financial Times Subscription Required
John Plender (FT) Aug 14, 2012
Eurozone saga overshadows biggest questions confronting investors including the haven status of US, UK and Germany.

Beijing's winning strategy in Africa
Brendan O'Reilly (AT) Aug 15, 2012
That China's rise in Africa amounts to neo-colonialism and is resented by Africans is a notion existing primarily in the minds of Western analysts. There are stark differences between Beijing's and Washington's foreign policies, and nowhere are these more obvious than in Africa: China's interests are purely economic, while the US remains obsessed with military dominance.

Italy’s 'this time it’s different' moment: Reaction to Giavazzi
Charles Wyplosz (VoxEU) Aug 15, 2012
Some maintain that Italy and Spain risk losing market access for their sovereign bonds despite drops in yields. A recent Vox column by Francesco Giavazzi suggested that Italy could and should avoid a bailout. This column argues that in spite of all its admirable human and economic assets, Italy has moved to a bad equilibrium from which it is most unlikely to escape.

Eurozone crisis: Time to tax the rich?
Stefan Bach & Gert Wagner (VoxEU) Aug 15, 2012
The European debt crisis drags on, dragging Europe down with it. This column argues that one-off capital levies – taxes on the rich – is one way of financing debt reduction. This could be an important step towards deleveraging public budgets without severely damaging the economy.

Why Are Governments Paralyzed?
Michael Spence and David Brady (Project Syndicate) Aug 15, 2012
Despite a palpable sense of concern that something is very wrong with the global economy, the prognosis for significant change is bleak. Of the many explanations for the apparent lack of effective policy action across a broad range of countries and regions, the most compelling may be a rapid decline in trust in elites.

The Mirage of Youth Unemployment
Steven Hill (Project Syndicate) Aug 15, 2012
Outrageously high youth unemployment – supposedly near 50% in Spain and Greece, and more than 20% in the eurozone – makes headlines daily. But these numbers result from a flawed methodology, making the situation appear far worse than it is.

Early Retirement for the Eurozone?
Nouriel Roubini (Project Syndicate) Aug 16, 2012
Germany and the ECB are now relying on the hope that large-scale liquidity will buy time to allow the adjustments needed to restore growth and debt sustainability in the eurozone periphery. But, if a eurozone breakup can only be postponed, delaying the inevitable would merely make the endgame worse – much worse.

The Chinese Hangover: As Infrastructure Spending Drops, So Does Demand for Chinese Steel
Raja Mukherji (PIMCO) Aug 15, 2012
China’s stimulus programs have created an overabundance of domestic steel capacity, as demand from domestic and export markets has fallen. The Chinese steel industry today shows many signs of serious economic difficulties brought about by the unprecedented size and speed of industry expansion. However, as the country’s focus shifts away from public investments and toward tax cuts, it will be difficult for China to absorb this overabundance of domestically produced steel. Ripple effects of this oversupply may include softening iron ore prices, a possible drop in the Australian dollar, and potentially weaker global steel prices.

Spain: Autonomy under fire Financial Times Subscription Required
David Gardner (FT) Aug 15, 2012
Tensions between indebted regions dedicated to defending their independence and a central government that wants to return power to the centre are being stoked by the euro crisis.

Greece should not be sacrificed for the euro Financial Times Subscription Required
George Pagoulatos (FT) Aug 15, 2012
Of all Greece’s many problems, including austerity, the threat of leaving the eurozone is the most damaging.

Long-term investors must rediscover their patience Financial Times Subscription Required
Paul Woolley and Dimitri Vayanos (FT) Aug 15, 2012
Traders have gained the upper hand recently and short-term price movements now dominate performance measurement and risk management.

China, the World's Greater Fool? Wall Street Journal Subscription Required
Joseph Sternberg (WSJ) Aug 16, 2012
A question or two about the wisdom of buying struggling Western companies.

Europe in limbo
WT Aug 15, 2012
Limbo does exist because Greece is stuck in it. The Greek economy is shrinking for the fifth year in a row, and no savior is in sight to pull it out. Unless Athens pursues serious internal reform, the country won't be able to stay in the eurozone or renew economic growth.

Reform - or be kicked out
Hossein Askari (AT) Aug 16, 2012
Without a range of changes in the Middle East's oil-exporting countries beyond basic political and institutional reforms, governments will be swept aside amid growing discontent among the needy and the unemployed, especially the young.

China’s Next Transformation
Andrew Sheng and Geng Xiao (Project Syndicate) Aug 16, 2012
During three decades of favorable global economic conditions, China created an integrated global production system unprecedented in scale and complexity. But now its policymakers must deal with the triple challenges of the unfolding European debt crisis, slow recovery in the US, and a secular growth slowdown in China’s economy.

Calling the Big Banks’ Bluff
Frank Schäffler and Norbert F. Tofall (Project Syndicate) Aug 16, 2012
Big banks’ ability to dictate terms to governments stems from an implicit threat: the financial sector – and with it the economy’s payment system – would collapse if a systemically important bank was ever pushed into insolvency. But maintaining the payment system can and should be separated from the problem of bank insolvency.

Sustainable Convictions
Mahmoud Mohieldin (Project Syndicate) Aug 16, 2012
Achieving a more sustainable world presupposes a worldview that considers well-being not only in terms of income, but also in terms of human security and opportunities for every person to thrive. It is worth considering what the world would look like from such a perspective.

What can central banks do?
John H. Makin (AEI) Aug 16, 2012
Although the Fed has announced its aim to reduce America's unemployment rate and boost economic growth, there is no guarantee that more quantitative easing will effectively stimulate more hiring or investment. With the eurozone falling back into recession, the European Central Bank (ECB) has promised to do whatever it takes to preserve the euro, but at best, ECB lending programs will provide only temporary relief to peripheral sovereign borrowers. To successfully affect fundamental economic variables, central banks such as the Fed and the ECB need to look toward restructuring US fiscal policy and Europe's flawed monetary system.

Debt dealers await move from greed to fear Financial Times Subscription Required
Henny Sender (FT) Aug 16, 2012
Credit hedge funds in Asia believe another distressed debt cycle is coming, a cycle that has been anticipated since the financial crisis 15 years ago

The ECB Is Too Tight Absolutely and Relatively
Scott Mather and Dirk Jeschke (PIMCO) Aug 16, 2012
The eurozone and global economic climate continues to be constrained by the ECB’s inappropriately tight monetary policy stance. Looking at measures of the quantity of money and its transmission into the real economy reveals that ECB policy is quite tight. Growth hardly stands a chance under this scenario. Relatively tight monetary policy would perhaps be understandable if the eurozone were threatened by inflation. However, inflation is low and falling in the Eurozone. The ECB may be playing a game of chicken with European policymakers. If true, this is a dangerous strategy.

China Trade Benefits Wall Street Journal Subscription Required
WSJ Aug 16, 2012
Swing elections states are among America's top exporters.

Saving France, Saving Europe
Michel Rocard (Project Syndicate) Aug 17, 2012
With the Socialists now in control of the presidency, the National Assembly, and almost all subnational governments, France is now witnessing a concentration of power that is unprecedented in its republican history. But the country's greatest concerns can still be resolved solely within the EU – and only if the EU survives.

How Sustainable Is the Pound’s Safe-Haven Status?
II Aug 17, 2012
Sterling is a safe-haven in a raging euro crisis. But how sustainable is the pound’s superhero status?

Why Europe Will Rise Again Wall Street Journal Subscription Required
Guy Sorman (WSJ) Aug 17, 2012
France's foremost free-market economist says that Europe's leaders won't let the euro fail, and the EU will save France from the French.

Singapore's Message for Today's America
Janadas Devan (Globalist) Aug 17, 2012
President Obama may have deeply offended American conservatives with his "you didn't build that" quip to business owners. But economic progress is the creation not of any one individual, but of a totality of people in a community, a democracy and a nation. The sooner we accept that, the sooner we can make sure everyone gains from globalization.

Free exchange: On the origin of specie
Economist Aug 18, 2012
Theories on where money comes from say something about where the dollar and euro will go.

Banking reform: Sticking together Economist Subscription Required
Economist Aug 18, 2012
Breaking up universal banks is a bad idea. There are better ways to make them safer.

Indian banks: Hold your nose Economist Subscription Required
Economist Aug 18, 2012
India’s public-sector banks are sitting on something unpleasant.

Rajoy must enact a radical plan for Spain Financial Times Subscription Required
Jesús Fernández-Villaverde and Luis Garicano (FT) Aug 19, 2012
You can’t play chicken when you drive a car and your opponent, the ECB, drives a tank.

Investment: Norway’s nest egg Financial Times Subscription Required
Richard Milne (FT) Aug 19, 2012
Oslo’s oil fund is seen as a paragon of responsible management of energy income but debate rages about its strategy.

A Flock of Black Swans Financial Times Subscription Required
Jeffrey Frankel (Project Syndicate) Aug 20, 2012
“Black swan” events are usually thought to be so improbable that they can be ruled out. But such events are considered virtually impossible only by those whose frame of reference is limited in time and geographical area, while those who account for other countries and other decades or centuries know better.

Europe's unstable hammock
Mohamed El-Erian (PIMCO/CNN) Aug 20, 2012
This summer I have been asked a lot about Europe -- not so much by economists but by others concerned that the lingering crisis there would make their daily economic life even more challenging.

Icelandic lessons in coming back from the brink Financial Times Subscription Required
Steingrímur Sigfússon (FT) Aug 20, 2012
Legislation granting priority to depositors in claims on the estates of fallen banks was crucial to resolving the crisis.

A world without Europe spells danger and woe Financial Times Subscription Required
Nader Mousavizadeh and Erik Jones (FT) Aug 20, 2012
The absence of Europe will leave the next US administration with little choice but to expand its foreign commitments.

Policy makers need to reduce uncertainty Financial Times Subscription Required
Sushil Wadhwani (FT) Aug 20, 2012
Private sector decision makers need to be reassured by European policy makers that the risk of a disorderly eurozone break-up is low.

Finance: The path to power Financial Times Subscription Required
Henny Sender (FT) Aug 20, 2012
A slew of infrastructure contracts will raise the prominence of export credit agencies from Asia but will also expose political faultlines.

Safeguarding Asia’s Growth
Jong-Wha Lee (Project Syndicate) Aug 21, 2012
Since the onset of the global financial crisis, Asian economies – bolstered by dynamic growth in China and India – have proven to be resilient. But, as global instability begins to take its toll, Asian countries must pursue preemptive policies to reduce their vulnerability to regional and global shocks.

Stop global economic malpractice
Richard Rahn (WT) Aug 21, 2012
Two centuries ago, it was common practice for the doctors to bleed a patient in the belief that it would get rid of the "vapors" that were thought to be causing the illness. As a result, most patients got worse and many died. Much of the world is now suffering from equally incompetent politicos playing economic doctors.

Spooked by Glass-Steagall’s Ghost?
Mark Roe (Project Syndicate) Aug 21, 2012
Until the 1990’s, the Glass-Steagall Act in the US separated commercial and investment banking – a rule that was central to US financial regulation (and thus to the operation of the global financial system) for more than a half-century. And now those who sought Glass-Steagall's repeal are expressing second thoughts.

China hit by demands of oversupply Financial Times Subscription Required
Simon Rabinovitch (FT) Aug 21, 2012
Companies face fight to whittle down inventories as manufacturers – like property developers and carmakers – sit on a mountain of unsold goods.

Thucydides’s trap has been sprung in the Pacific Financial Times Subscription Required
Graham Allison (FT) Aug 21, 2012
In 5BC, threat and counter-threat produced competition, then confrontation and finally conflict. After 30 years of war, Athens and Sparta were destroyed.

Beware the Faustian bargains of central banks Financial Times Subscription Required
Scott Minerd (FT) Aug 21, 2012
As a result of multi-trillion-dollar quantitative easing programmes, the ability to control the money supply has been compromised

Demography: China’s Achilles heel Economist Subscription Required
Economist Aug 21, 2012
A comparison with America reveals a deep flaw in China’s model of growth.

Aug 21, 2012

Aug 21, 2012

How Volcker Created a Gold Standard Without Gold
William L. Silber (Bloomberg) Aug 22, 2012
On Aug. 14, 1979, a week after he took office as chairman of the Federal Reserve, Paul Volcker led his first meeting of the Federal Open Market Committee. “Economic policy,” he said, “has a kind of crisis of credibility.” As a result, “dramatic action” to combat inflation would not receive public support “without more of a crisis atmosphere.” He did not have to wait long.

The euro break up
Martin Hutchinson (AT) Aug 22, 2012
The euro break-up will start with Greece - but it will be cheaper than some forecast. After that, things become complicated as a north-south divide gives two "euro" areas, plus France and Italy, with their dismal fiscal management, on the outside.

Keynes would compare well against today’s hedge funds Financial Times Subscription Required
Garyn Davies (FT) Aug 22, 2012
While his macroeconomics continue to dominate policy debate today, many have forgotten that the great intellectual was also a very active investor

Another tech bubble is set to deflate Financial Times Subscription Required
Philip Delves Broughton (FT) Aug 22, 2012
It is one thing when Neanderthals guffaw at the idea of Twitter, another when Valley insiders worry that the gig is up.

North of the border Financial Times Subscription Required
Adam Thomson (FT) Aug 22, 2012
Mexico’s businesses are shedding an image of being focused on cheap factories exporting to US multinational groups.

Income and wealth taxes in the euro area: An initial overview Adobe Acrobat Required
Dieter Bräuninger (DB Research) Aug 22, 2012
Higher taxes for those on higher incomes and the wealthy to finance the costs of the crisis and cut budget deficits are being debated in the euro area – including Germany. Several countries have already taken action. If countries decide in favour of the state imposing such taxes, they face a difficult balancing act. Beside the fiscal and distributional targets and hopes, it has to be borne in mind that attention is to be paid to the risks to economic growth, which may result from negative incentive effects, and balance them against the former.

A Global Solutions Network
Jeffrey D. Sachs (Project Syndicate) Aug 22, 2012
Humanity needs to learn new ways to produce and use energy, grow food, build and sustain cities, and manage our common heritage of oceans, biodiversity, land, and atmosphere. To empower global society to act, the UN's new Sustainable Development Solutions Network aims to mobilize global knowledge that can save the planet.

Africa’s Dictator-Diplomat
Charles Tannock (Project Syndicate) Aug 22, 2012
For his admirers and critics alike, Ethiopia's late prime minister, Meles Zenawi, leaves behind a potent political legacy. He will be remembered as an African leader of major historical significance: visionary, despotic, and indispensable.

China’s House Divided
Christopher R. Hill (Project Syndicate) Aug 22, 2012
There has been much talk about America’s decline in recent years, with the corollary that China will take its place. But, while the United States does indeed face problems that urgently need to be addressed, if China is to rise further, to say nothing of supplanting the US internationally, it must first put its own house in order.

Economics in Denial
Howard Davies (Project Syndicate) Aug 22, 2012
Four years into the worst financial crisis in 80 years, it is not at all clear that a majority of the economics profession has drawn relevant lessons for their models of markets and prices. Worse still, it appears that many of them are convinced that there is no need to try.

Old wealth reborn in new Indonesia
Megawati Wijaya (AT) Aug 23, 2012
The Asian economic crisis of 1997-8 savaged Indonesia's leading business conglomerates such as Sinar Mas Group and Salim Group. Barely a decade later, many have recovered their dominant market positions and built vast wealth in the process - without the help of the man seen as their key patron, the late president Suharto.

Why the Euro Will Survive: Completing the Continent's Half-Built House
C. Fred Bergsten (PIIE) Aug 23, 2012
As doom and gloom about the euro abounds, an increasing number of commentators and economists question whether the common currency can survive. An even deeper crisis allegedly threatens the world economy.

America’s Exceptional Fiscal Conservatism
Simon Johnson (Project Syndicate) Aug 23, 2012
In most countries, to be “fiscally conservative” means to worry about the budget deficit and debt levels – and to push these issues to the top of the policy agenda. But, in the US, “fiscal conservatives” care more about cutting taxes, regardless of the effect on the budget deficit and total outstanding debt.

Yen window open - for now
Omkar Y Godbole (AT) Aug 24, 2012
Japan's position as a currency "safe-haven" has helped the yen, despite a poor domestic economy, maintain its strong position against the US dollar. That creates a useful currency trading window linked to US economic data, although in the longer term a debt crisis in the Asian giant will slam it shut.

The Heirs of Inequality
Alexander Stille (Project Syndicate) Aug 24, 2012
It has long been known that spurts of rapid economic growth can increase inequality: China and India are the latest examples. But might slow growth and rising inequality – the two most salient characteristics of developed economies nowadays – also be connected?

Government debt: Better at home or abroad?
Jan Schildbach (DB Research) Aug 23, 2012
After two decades of international financial integration, foreign investors have decided to pull out of Italy and Spain. In this context two central questions arise: what is the cause of this development and what are its consequences?

Emerging markets test Nordic constitutions Financial Times Subscription Required
Richard Milne (FT) Aug 23, 2012
The travails of Carlsberg and Telenor demonstrate the need for setbacks to be met with cold-blooded analysis of whether rewards outweigh the risks.

Beware the five common myths about the Spanish economy Financial Times Subscription Required
José María Beneyto and Alexandre Perez (FT) Aug 23, 2012
Investors can be accused of failing to be sufficiently sceptical of what the market is telling them.

Don’t be fooled by short-selling bans Financial Times Subscription Required
Gillian Tett (FT) Aug 23, 2012
A new paper on their effects from says there is little evidence the US ban halted share price declines, but it hurt market mechanisms as liquidity dried up.

Larry Summers and the Imperialism of Economics
H. Woody Brock (Globalist) Aug 24, 2012
Economists may have been latecomers to the halls of political power, but in recent decades they have become indispensable advisors to prime ministers and presidents. Despite the influence economists now wield over public policy. Many of the most pressing problems remain political in nature — and will require political solutions.

Angela, beware the furious Finns
Economist Aug 25, 2012
Could a northern European creditor nation leave the euro?

Finland and the euro crisis: Northern gripes Economist Subscription Required
Economist Aug 25, 2012
The Finns are being hard-nosed because they face their own hardship.

A wake up call for South Africa’s Armani elitists Financial Times Subscription Required
Jay Naidoo (FT) Aug 26, 2012
We ignored the festering discontent in the bosom of our economy. People are exhausted by the excuses given by leaders.

The ECB must still do its bit to help solve the crisis Financial Times Subscription Required
Wolfgang Münchau (FT) Aug 26, 2012
An ECB bond purchasing programme would form an important staging post, but it would be wrong to regard it as a magic bullet.

We need much simpler rules to rein in the banks Financial Times Subscription Required
Nicholas Brady (FT) Aug 26, 2012
The aim should be to permit innovation while also creating less complex boundaries that everyone can understand.

Eurozone needs a German sovereign wealth fund Financial Times Subscription Required
Daniel Gros and Thomas Mayer (FT) Aug 27, 2012
Choose the lesser evil: a strong euro with internal tensions or a weaker euro without tensions.

Finance is in need of a technological revolution Financial Times Subscription Required
Andrew Lo (FT) Aug 27, 2012
While technology has advanced tremendously in the past century, human cognitive abilities have remained the same.

Food prices on the rise again, no crisis in sight yet
Claire Schaffnit-Chatterjee (DB Research) Aug 27, 2012
Corn, wheat and soybean prices skyrocketed in June-July although they have slightly decreased in the past few weeks. In July, the cereals price index of the FAO (Food and Agriculture Organization of the UN) went up 17% to reach 260 points, close to the record high of 274 points reached in spring 2008 (the peak in April 2011 was 265). The overall food price index climbed 6% in July to reach 213 points, still far from the peak of 238 reached in February 2011.

Judgment Day for the Eurozone
Hans-Werner Sinn (Project Syndicate) Aug 27, 2012
Europe and the world are eagerly awaiting the decision of Germany’s Constitutional Court on September 12 regarding the European Stability Mechanism, the proposed emergency lender for the eurozone. Most observers believe that the Court will not oppose the ESM, though the judges could demand amendments.

China in the Eye of the Beholder
Minxin Pei (Project Syndicate) Aug 27, 2012
One of the most glaring, if unremarked, oddities concerning China nowadays is how perceptions of its leaders diverge depending on the observer. To the Chinese public, government officials are venal, incompetent, and often cruel; but Western executives invariably describe Chinese officials as smart, decisive, and far-sighted.

Philippine Economy Is Set to Become Asia's Newest Bright Spot New York Times Subscription Required
Floyd Whaley (NYT) Aug 27, 2012
Young urban workers in the Philippines are helping to give the country its best prospects in decades, economists say.

Keynesianism vs. the Gold-Coin Standard
Gary North (Mises Daily) Aug 27, 2012
Recently, the leftist London Guardian posted an article against the 19th-century gold-coin standard. The author, who seems recently to have begun shaving, has provided a highly useful summary of the Keynesian case against the gold-coin standard. His article is a fine mixture of familiar old canards and creative new errors. His name is Duncan Weldon.

Merkel in China
Sanjaya Baru (Project Syndicate) Aug 28, 2012
German Chancellor Angela Merkel’s second visit to China in a year comes against the backdrop of dire forecasts of a difficult September for the eurozone. Mindful of such concerns and persistent pessimism in global financial markets, Merkel is now taking bold initiatives at home and overseas, as her China trip demonstrates.

Making Europe Work Financial Times Subscription Required
Howard Davies (Project Syndicate) Aug 28, 2012
If Europe wants to revive sustainable growth and high employment, it must replicate what has worked in those countries that have performed successfully. Doing so will cost money, and governments must be prepared to persuade their electorates that it would be money well spent.

Has 'Europe' Failed? New York Times Subscription Required
Nicholas Sambanis (NYT) Aug 28, 2012
The European debt crisis is not just an economic crisis: it is an escalating identity conflict an ethnic conflict.

China struggles to adopt new growth model Financial Times Subscription Required
Henny Sender (FT) Aug 28, 2012
For years companies and individuals had a voracious appetite for money, and market capitalisations of banks soared.Today, nobody wants to borrow much

Brazil: Appetite for construction Financial Times Subscription Required
Joe Leahy (FT) Aug 28, 2012
As the country prepares for the World Cup and Olympics, a plan to boost infrastructure offers a chance to break logistical bottlenecks.

Bernanke should show some humility Financial Times Subscription Required
Bob Corker (FT) Aug 28, 2012
We must fix the central bank’s flawed dual mandate. But first we should ensure the next chairman sees the limits to monetary policy.

Everything You Think You Know About China Is Wrong
Minxin Pei (FP) Aug 29, 2012
Are we obsessing about its rise when we should be worrying about its fall?

China and the US Repeat History in Africa
Judy Bachrach (World Affairs) Aug 28, 2012
There’s nothing new about China’s recent record of arms sales to African nations—in fact, other superpowers started that pattern almost seventy years ago.

An Autumn Abyss?
Joschka Fischer (Project Syndicate) Aug 29, 2012
In the course of the summer, tensions have risen in the Middle East, as Egypt struggles to establish an effective government, Israel and Iran adopt increasingly bellicose rhetoric, and Syria’s civil war rages on. In the coming months, the region's many crises will inevitably interact – and could well fuel global upheaval.

Europe’s Necessary Union
Jose M. Barroso (Project Syndicate) Aug 29, 2012
The European Commission is busy drafting a proposal to create a European banking union, with the European Central Bank at the heart of a new system of integrated banking supervision, designed to help restore confidence in the euro. Such a mechanism is essential to ensuring confidence and financial stability.

China is Okay
Stephen S. Roach (Project Syndicate) Aug 29, 2012
Around the world, concern is growing that China’s economy could be headed for a hard landing. But the doom-and-gloom hype overlooks one of the most important drivers of China’s modernization: the greatest urbanization story the world has ever seen – and one that will fuel investment and consumption for decades to come.

Indonesia: Archipelago apprehension Financial Times Subscription Required
Ben Bland (FT) Aug 29, 2012
Cronyism and reliance on commodities exports may limit south-east Asia’s biggest economy but politicians look unlikely to push through reforms.

The financial system rests on quicksand Financial Times Subscription Required
John Gapper (FT) Aug 29, 2012
The old bank run has been updated to corporate treasurers wiring money from money market funds at any hint of trouble.

Polar melting signals end of ‘Pax Arctica’ Financial Times Subscription Required
Irvin Studin (FT) Aug 29, 2012
A largely ice-free Arctic will bring a new, porous border to a continent that has long had the best borders of them all.

The Gold Standard Goes Mainstream Wall Street Journal Subscription Required
Seth Lipsky (WSJ) Aug 29, 2012
In the ferment within today's Republican Party, there's a growing realization that America's system of fiat money is part of the economic problem.

Frankfurt vs. Frankfurt Wall Street Journal Subscription Required
WSJ Aug 29, 2012
The Bundesbank is holding out against an ECB spending spree.

Africa at work: Job creation and inclusive growth
David Fine, Arend van Wamelen, Susan Lund, Armando Cabral, Mourad Taoufiki, Norbert Dörr, Acha Leke, Charles Roxburgh, Jörg Schubert and Paul Cook (McKinsey) Aug 30, 2012
Africa is the world’s second-fastest-growing region. Poverty is falling, and around 90 million of its households have joined the world’s consuming classes—an increase of 31 million in just over a decade. But a new McKinsey Global Institute report, Africa at work: Job creation and inclusive growth, shows that the continent must create wage-paying jobs more quickly to sustain these successes and ensure that growth benefits the majority of its people.

Europe’s Crisis Goes to Court
Edin Mujagic and Sylvester Eijffinger (Project Syndicate) Aug 30, 2012
Economists almost everywhere are debating potential solutions to the euro crisis, while failing to account for one crucial element of any resolution: the German Constitutional Court. But, given that no solution can be implemented without the court's approval, debates that disregard it are meaningless.

Don't Look to China for Economic Growth
William Pesek (Bloomberg) Aug 30, 2012
Policy makers around the world have long envied China’s ability to get big things done. A huge 4 trillion-yuan ($630 billion) stimulus plan as the global economy cratered in 2008? No problem. Marshaling banks to lend trillions more? Check. Enacting sweeping regulatory changes at a moment’s notice? You bet.

Come on Bernanke, fire up the helicopter engines Financial Times Subscription Required
Samuel Brittan (FT) Aug 30, 2012
A few of its more reasonable members might just countenance the Fed experimenting with the equivalent of a helicopter drop.

How to protect EU taxpayers against bank failures Financial Times Subscription Required
Wolfgang Schäuble (FT) Aug 30, 2012
We must eschew the light-touch approach and give the new supervisor real responsibilities, coercive powers and resources.

Investing: Hedges on the edge Financial Times Subscription Required
Sam Jones (FT) Aug 30, 2012
In an industry built on high risk and high returns pulls in ever more assets, some of the biggest managers are adopting a more cautious model.

Islamic tools to the rescue
Hossein Askari (AT) Aug 30, 2012
The misuse of oil cash by Persian Gulf rulers has created dire domestic problems while spreading corruption and self-enrichment beyond the region. The domestic time-bomb can still be defused, although a policy turn-around is required as endorsed by Islamic teaching.

Making Sense of the IMF Quota Formula
Edwin M. Truman (PIIE) Aug 30, 2012
The formula employed by the International Monetary Fund (IMF) and its members to help guide the distribution of the Fund's quota subscriptions and voting power is one of the more arcane topics in international finance. But it is also a proxy for many large and important zero-sum issues, such as which countries are up and which countries are down, which countries should call the shots and which countries should not, and which countries deserve support and which do not. At stake, then, is nothing less than how economic power is to be distributed and recognized among emerging market, developing, and developed countries.

Watching the Bank of Bernanke
James Grant (WP) Aug 30, 2012
The Fed should be worth its weight in gold.

Germany and China: Europe's New Special Relationship
Stephan Richter (Globalist) Aug 30, 2012
For several decades, the Americans believed they "owned" the West's relationship with China. Then, a woman entered the global diplomatic game and things changed. Hint: It's not Hillary Clinton. It's Angela Merkel, the world's leading woman politician.

What went wrong in Mali?
Bruce Whitehouse (LRB) Aug 30, 2012
The Republic of Mali has long been seen as the exception to the dictatorships or civil wars that have seemed the rule in West Africa: a state that was able to shift from autocracy to democratic governance. It lost that distinction on 21 March, when troops in Bamako mutinied, captured the state television station and stormed the presidential palace. But the cracks in Mali’s democracy were present before the latest Tuareg rebellion. The 1992 constitution, the free press and regular elections obscured long-standing anti-democratic practices. Western governments, glad to see the formal trappings of democracy anywhere in the region, tolerated these abuses. More

Favoring Foreigners in (Indian) Finance
Arvind Subramanian (Business Standard/PIIE) Aug 30, 2012
Can nationalism be harnessed to promote sound economic policies? That seems an odd question to raise at a time when Indian policymakers have rightly been taken to task in recent months for the heavy-handed and arbitrary treatment of foreign investors. But, yes, in the financial sector, policies penalize or tax Indians while treating foreigners more favorably.

AIG, Surprise Moneymaker Wall Street Journal Subscription Required
Holman Jenkins (WSJ) Aug 31, 2012
Its profits for taxpayers cast doubt on the notion that it behaved recklessly before the panic struck.

Federalism or Bust for Europe?
Jean Pisani-Ferry (Project Syndicate) Aug 31, 2012
Is Europe inventing a new governance model, or has it only taken a detour from the inevitable choice between disintegration and conventional federalism? Whatever route it takes, Europe must address the weak representation of the common interest – or else admit that no such interest justifies remaining on the path of integration.

The Roots of Chile’s Malaise
Andres Velasco (Project Syndicate) Aug 31, 2012
Margaret Thatcher famously once said that “there is no such thing as society.” But, as protesting Chileans have been showing for more than a year, society does exist, and the quality of interactions within it matter profoundly for people's satisfaction with their lives.

Merkel wedded to euro, guilt
Gunnar Beck (AT) Aug 31, 2012
German Chancellor Angela Merkel insists that if the euro fails, Europe fails - eliding the unspoken truth that letting the currency collapse would be to abnegate her country's never-ending need to atone for past deeds - a guilt that underpins 10 reasons Germany will cling to the euro.

China's cash: Take it or lose it?
Ting Xu (AT) Aug 31, 2012
China's foreign direct investment in North America and Europe is unrelenting even as the United States maintains roadblocks against this trend. Washington cites national security concerns, but it and its Western allies must take advantage of the economic opportunities China's interest presents.

Home | Economics | Business & Finance | Politics | Law | ICT | Development | News | Research