In The News

IMF Study on Debt Reduction: What It Says, What It Doesn't

William G. Gale and Diane Lim June 24, 2015
International Monetary Fund research concludes that countries should prioritize stimulus spending over debt reduction during times of economic stability. US politicians should not take this as a recommendation to continue deficit spending, suggest William G. Gale and Diane Lim for Brookings. The IMF model relies on two assumptions – that returns on infrastructure are greater than the market rate...

Three Perilous Options for Greece Facing Europe

Gideon Rachman June 23, 2015
The Greek debt crisis may well destroy the European single currency, argues Financial Times columnist Gideon Rachman: Greece’s debts are immense, and no logical plan is in place for repayment or rapid reforms. If Greece remains in the EU, the nation would be a weak and struggling partner. More EU concessions for Greece would undermine governments in Ireland and Portugal that have endured...

Why It’s So Hard to Predict the Impact of a Greek Default

Alex Rosenberg June 19, 2015
Greece owes more than €240 billion and may default – and may even withdraw from the European Union – if creditors including the EU, especially Germany, and the International Monetary Fund do not provide another bailout. Greek debt is about a third to half that of the US subprime mortgage debt before the global debt crisis struck in 2007. Consequences for the global economy are unknown, but...

China Must Prove Silk Road Plan Is Serious

George Magnus May 6, 2015
China is trying to reinforce its ties with its neighbors with a modern-day Silk Road that links 65 nations: “the so-called One Belt, One Road plan – incorporating a Maritime Silk Road – has become the centerpiece of the president’s foreign policy and international economic strategy. Important commercial consequences for the region and global companies will go hand-in-hand with unpredictable...

The Dollar Joins the Currency Wars

Nouriel Roubini May 6, 2015
Countries want to export more than they import and promote growth and employment. More than 20 central banks around the globe have eased monetary policy, reducing the value of their currencies to make exports more attractive, explains economist Nouriel Roubini for Project Syndicate. He notes that trade and lending imbalances are growing. “The dollar has also risen relative to currencies of...

Economic Policy Turned Inside Out

Stephen S. Roach May 4, 2015
Unsustainable economic imbalances combined with financial engineering to reduce interest rates and currency values, could threaten the global economy, suggests economist Stephen S. Roach, a senior fellow at Yale University’s Jackson Institute of Global Affairs. The essay focuses on Japan’s struggle since 1985 to revive its economy by relying on monetary policy. In 2002, the US Federal Reserve...

High Debt and Low Oil Prices Threaten Canada’s Globalized Economy

Vikram Mansharamani April 20, 2015
The world’s 11th largest economy does not rank among the world’s 30 most populous countries. Despite handily managing the global debt crisis after 2007, Canada’s economy is vulnerable. Volatility brought by globalization and interdependency may bear part of the blame, explains Vikram Mansharamani, a Yale lecturer and senior fellow at the Mossavar-Rahmani Center for Business and Government at the...