In The News

Default or Not, Asia Hostage to US Debt

Choonsik Yoo, Kevin Yao September 30, 2013
Asia is shaking its collective head over dysfunctional US politics. A minority group of US legislators is toying with procedures, presenting the possibility of a government shutdown and a default on the country’s debt while expecting the majority of legislators to meet their demands to delay a healthcare law and cut spending. Creditors in China, Japan and elsewhere in Asia hold about $5 trillion...

China’s American Bailout?

Alexander Friedman August 26, 2013
The US economy focuses on spending, and the Chinese economy largely focuses on saving and lending to the US – “a pattern that has suppressed global interest rates, helped to reflate the developed world’s leverage bubble, and, through its impact on the currency market, fueled China’s meteoric rise,” suggests investment banker Alexander Friedman writing for Project Syndicate. He points out the...

How the Wealthy Keep Themselves on Top

Tim Harford August 20, 2013
Inequality is pronounced and widening, particularly in the United States and the United Kingdom, but also Australia and Canada. People tend to care more about inequality during times of economic crisis, suggests Tim Harford. “The uncomfortable truth is that market forces – that is, the result of freely agreed contracts – are probably behind much of the rise in inequality,” he writes for the...

Don’t Cry For Me, Motown

Nayan Chanda August 19, 2013
Detroit was a US auto manufacturing center a few decades ago, but now its population of 700,000, down from 2 million, cannot afford to pay off $18 billion in debt and unfunded liabilities. The city has filed for bankruptcy. “Outsourcing, automation and suburbanisation have drained its population” and “the bankruptcy of what used to be the country’s fourth-largest city does indeed signal the...

Rescuing the European Model

Joergen Oerstroem Moeller May 2, 2013
Europe has suffered through a debt crisis, but governments are trimming, not abandoning, social welfare programs. Such modifications could become a model for economic globalization around the globe, suggests Joergen Oerstroem Moeller, a senior research fellow with the Institute of Southeast Asian Studies in Singapore. Europe is reducing budgets while preserving social protections for the future...

OECD Sounds Fresh Warning on Japan

Ben McLannahan April 23, 2013
Controlling debt should be a top challenge for Japan, the world’s third largest economy, suggests the OECD. Stimulus spending offers potential for economic growth but “should be accompanied by a detailed ‘blueprint’ to put the country’s finances on a more stable footing,” reports Ben McLannahan for the Financial Times. Japan’s debt is predicted to be well more than double its gross domestic...

Instead of the State, Globalization Has Withered

Julie Novak April 19, 2013
Nations are keen to control globalization, welcoming the best ideas and talent and keeping away the problems, a task much easier said than done. Most nations appreciate a large choice in trendy products, hard-working and innovative immigrants, and a reputation for being cosmopolitan. The 2008 financial crisis enlarged rather than destroy government, fueled by fiscal stimulus spending, maintains...