In The News

The Great U-Turn

Patrick Barta, Joel Millman June 18, 2009
Over the past century, individuals seeking to better their lives have seen the US as the land of opportunity. But the recent economic recession has apparently changed this view, as some immigrants are deciding to return home, for good. But it is not just the US that faces this new trend. This year, many developed countries have seen double digit year-over-year drops in immigration rates from...

In Thrall To A Glittering Prize

Nick O’Malley June 10, 2009
As a result of the global economic downturn, demand for at least one product increased: gold. As in past periods of uncertainty, with the drop in the stock market, investors turned to gold as a safe, more reliable store of value. This demand, combined with gold jewelry’s popularity among the new middle classes in China and India, took the price of the yellow metal to a new all-time high. With...

Government Motors

Nayan Chanda June 5, 2009
General Motor’s bankruptcy is as much a failure of the company to remain competitive as it is a failure of GM to embrace globalization. Once the industry leader, the auto behemoth was laid low by high labor costs and bad management. But it was perhaps protectionism, a protectionism that did not require GM to adapt to the global market, that ultimately killed the car maker. GM could not compete in...

The Way We Live Now: Diminished Returns

Niall Ferguson May 18, 2009
Claims that deregulation caused the financial crisis miss the mark, according to economic historian Niall Ferguson. Deregulation has been going on since the 1980s and led to growth as well as decline. And regulation failed to prevent financial collapses in the 1970s. Moreover, regulation, as evidenced by the Basel I and II international accords on bank standards, actually allowed leverage to get...

Trade Wars Brewing In Economic Malaise

Anthony Faiola, Lori Montgomery May 15, 2009
In a new twist to protectionism, local governments in the US have reduced purchases of products from traditional partners like Canada due to “buy American” clauses in the federal government’s stimulus package. Unlike usual protectionist measures such as tariffs, quotas, or subsidies, buying from domestic suppliers is not open to litigation via the World Trade Organization. Yet it seems the...

Two Views on the Cause of the Global Crisis – Part II

Ashok Bardhan May 6, 2009
Lax regulation may have been the lever that pushed the world into the present financial crisis, but the fulcrum was the twin excesses of over-financialization and over-globalization, according to UC Berkeley economist Ashok Bardhan. In the case of over-financialization, financial asset bubbles rose to several times the global GDP, leading to an overheating of the economy. Meanwhile, over-...

The EU Can Ignore Eastern Europe at Its Own Peril

Katinka Barysch April 17, 2009
At the G-20 meeting and subsequent media commentaries, focus has been on the travails of the European Union. But Eastern Europe is often lost sight of in the expression of cautious optimism about the EU economy weathering the storm. The former Soviet bloc countries, cautions analyst Katinka Barysch, are still at risk from the financial crisis with serious negative consequences for the West. Many...