In The News

The Next Globalization Backlash

Sebastian Mallaby July 3, 2007
Globally, with national reserves growing, countries move spare cash into sovereign wealth funds. Oil-rich countries, such as Russia and Nigeria, have experienced high growth rates, and it is unlikely that hydrocarbon prices will fall anytime soon. A global trade imbalance also spurs the funds’ growth. East Asian countries, such as China and Japan, have accumulated large sums, while the US...

Capitalism with Special Chinese Characteristics

Gustav Ranis June 19, 2007
On the surface, China’s fast-growing economy looks superb. However, growing income inequality and the massive inflow of foreign funds can pose problems that often go unrecognized. International economics professor Gustav Ranis categorizes China’s economic problems as a type of “Dutch Disease,” a phenomenon when rapid growth in one export can lead to pockets of excessive wealth, weakening of other...

Stock Market Hiccups No Cause for Worry

Manu Bhaskaran April 5, 2007
Economists debate whether the financial interdependence of the modern world provides insulation against shocks or sets the stage for a chain reaction of woes. Every major power has its financial weak point – immense debt for the US; regional conflicts and poverty for India; and a lack of transparency for China combined with uncertainty over how communist leaders can control a population accruing...

Capital Warfare

Heidi Crebo-Rediker March 29, 2007
If American policymakers hope to exercise influence in international affairs, they must recognize that US control wanes as more economic power spreads around the globe. The US can prepare accordingly by recognizing its own deficiencies – high debt, protectionist tendencies and overdependence on foreign oil – and instituting reform. States that are a prime source, destination and market for...

Why “Fair Trade” Could Backfire for the US

David Dapice March 26, 2007
As manufacturing jobs continue to slip away from the US, Democrats in control of US Congress could be tempted to apply protectionist measures. But any regulations that attempt to restrict trade could backfire and chase more skilled jobs abroad. Economist David Dapice describes US economic problems – unbalanced budgets, a negative savings rate – as “home grown,” and the solutions require sacrifice...

Paulson Says Foreign Treasuries Holdings Not Threat

Christopher Swann March 5, 2007
The US holds more than $4 trillion in debt – almost $15,000 for every man, woman and child – and foreign investors hold more than half the notes. In response to congressional critics who question the strength of the US economy, Treasury Secretary Hank Paulson reports seeing no problem with foreign investors lending funds to the US. Even though US Congress controls spending appropriations, some...

US Heading For Financial Trouble?

Steve Kroft March 5, 2007
The US weakens its own security by borrowing vast sums from China and other nations to pay for reckless spending with little accountability. The nation, by not reducing spending or restructuring its health-care system over the next 20 years, will have to prepare for bankruptcy, insists David Walker, the US comptroller general, who has gone on tour to urge voters and politicians to oppose the...