In The News

Be Careful What You Wish For

September 28, 2006
A global economy closely binds the prosperity of the US and China, points out Henry Paulson, US treasury secretary. The US has been among the loudest clamoring for China to increase the value of its currency – but appreciation in the yuan may not necessarily ease US economic woes. China’s competitive advantage is not linked to currency differences alone, but also labor costs as well. A rising...

Economic Forum Warns US of Budget Deficit's Ill Effects

Marcus Walker September 27, 2006
Mired in debt, the US has lost its competitive edge, dropping from first to sixth place in one year, according to the World Economic Forum. While debt decreases the nation’s flexibility and ability to sustain economic growth, the US still leads in innovation, as demonstrated by patents and quality of university of research, notes a chief economist for the forum. However, an $8.49 trillion debt...

Why Globalization Isn’t a Win-Win Situation

Stephen Roach July 12, 2006
A bilateral US-China trade relationship poses some dangers, according to global economist Stephen Roach. US policies encourage over-consumption and under-production in the global economy, resulting in a low saving rate and stagnating wages for middle-class workers. China’s policies focus on rapid over-production, a massive surplus of goods, a high savings rate, as well as wage inflation of...

Imbalances Can’t Go on Forever

Ernesto Zedillo July 10, 2006
The current strength of the world economy is not enough to protect against the global financial crisis that could result if imbalances such as the US account deficit go unresolved. Economists supply a range of explanations as to what facilitates US debt. Expectations of higher income and productivity make saving seem less urgent, and the US remains an attractive place for other countries to...

Oil-Rich Russia Makes Ruble Convertible

Nick Paton Walsh July 5, 2006
Capitalizing on its growing status as a global energy supplier, Russia is making the ruble fully convertible in an attempt to renew its currency’s international status. The move will decrease the government’s control over the value of the ruble, opening the door for foreign investment in the currency. Riding dual waves of oil money and optimism, Russia is paying off its Soviet-era debts to the...

Global Capital on the Run

Robert J. Samuelson June 14, 2006
Around the world, stock markets are in a sharp decline, and analysts are trying to determine if herd mentality is at work or if the trend reveals other risks. At the same time, more investors venture beyond national borders in search of opportunities. Thirty years ago, foreign investing was tightly restricted, with the US as an exception to the rule, although the wealthiest of citizens always...

It’s Been Too Good for Too Long

Peter Hartcher June 13, 2006
Consumers, businesses and even countries have indulged in debt, funding all sorts of projects, from the luxurious to the ludicrous. But central banks around the world are acting to end the days of cheap liquidity, removing money and pushing up interest rates, warns journalist Peter Hartcher. After years of low interest rates and excessive spending, the US and its big spenders have most reason to...