In The News

The False Promise of Financial Liberalization

Dani Rodrik January 22, 2007
Free capital flow over the past 15 years was supposed to help developing nations, writes Dani Rodrik, political economy professor with Harvard University, with excess funds moving from wealthy nations to worthy projects around the world, smoothing out boom-and-bust cycles and decreasing corruption. However, Rodrik points out that the developing nations with the most successful economies – China,...

US and China Differ on Aim of Economic Talks

Steven R. Weisman December 18, 2006
After proposing dialogue on trade with China, the US treasury secretary did not expect Beijing to be so quick with its own sage advice for Washington. While the US expects China to adjust its currency, allowing it to float in relation to the dollar, China wants the US to stop borrowing so much money. Adjusting the Chinese currency would perhaps slow the Chinese export market, allowing China to...

Taming the Dragon

Gordon G. Chang December 15, 2006
Americans misunderstand their relationship with the Chinese, and that’s why little progress is made during any negotiations between the two nations, argues author Gordon Chang. The US repeatedly and mistakenly assumes that China can’t be pressured and that China has the upper hand because it holds so much US debt. Even if China were to pursue euros and yen instead of dollars, Chang argues that...

Slumping Dollar Has Nasty Surprise in Store for Lebanese Consumers

Michael Bluhm December 11, 2006
Even as Lebanon tries to avoid falling into civil war, the country’s fortunes are further imperiled by the falling US dollar. The dollar plays a prominent role in Lebanon’s economy: It is universally accepted alongside the Lebanese pound, and bank machines routinely dispense money in both pounds and dollars. Now, a weaker dollar means that Lebanese consumers can expect to pay more for goods...

Competitiveness, Not Offshoring, Is EU Weakness

Natascha Gewaltig November 15, 2006
Inexpensive cheap global labor poses fewer problems for the EU than accelerating technological change and the inability to adapt, according to a study from the European Commission. The global outsourcing market grew over the previous decade, from 8 percent of the world GDP in 1990 to 11 percent in 2003. The EU outsourcing market represented almost 15 percent of its GDP in 2003. “Technical...

Bad Trade-Off

Stuart Anderson November 10, 2006
Analysts anticipate that a US Congress controlled by Democrats will scrutinize and even stall free-trade agreements. Under Democrats, Congress will probably not extend the Republican president’s fast-track authority for approving trade agreements, which expires in July 2007. Democrats criticized the Bush administration for allowing manufacturing firms to invest in overseas plants, particularly...

How to Fix the Global Economy

Joseph E. Stiglitz October 4, 2006
The world has many imbalances, including ballooning debt held by the US and China’s growing trade surplus. World leaders recognize the problems – but tend to place blame on policies from other countries. Economist Joseph Stiglitz suggests that the problems are interconnected in many ways, systemic in nature, and therefore require a global effort. He urges every country to examine its own...