In The News

America’s China Worries – Part II

Bruce Stokes February 8, 2007
China has emerged as both mammoth producer and consumer, and that means more countries, including key US allies, depend on China for their economic well-being. The second article in this three-part series on worries besetting China-US relations explores how one nation’s expanding influence over global trade policy diminishes the other’s influence and flexibility. As the US trade imbalance with...

The Global Question: Who Needs the US?

Peter Gumbel January 30, 2007
Global trade has flourished in recent years, so much so that it’s no longer the province of developed nations. The US is the world’s leading economy, accounting for almost 30 percent of the world’s gross domestic product, yet the nation cannot sustain prosperity by living on funds borrowed from China and other nations that save. Economists remain divided about how much a disruption in any...

What $1.2 Trillion Can Buy

David Leonhardt January 19, 2007
Before making an expenditure or investment, economists often analyze what the money could have bought instead, and in a “New York Times article,” journalist David Leonhardt explores the opportunity costs of the $1.2 trillion spent by the US on the Iraq war. Leonhardt relies on a conservative estimate of the direct and indirect costs of a war originally estimated to cost $50 billion by the...

US and China Differ on Aim of Economic Talks

Steven R. Weisman December 18, 2006
After proposing dialogue on trade with China, the US treasury secretary did not expect Beijing to be so quick with its own sage advice for Washington. While the US expects China to adjust its currency, allowing it to float in relation to the dollar, China wants the US to stop borrowing so much money. Adjusting the Chinese currency would perhaps slow the Chinese export market, allowing China to...

Taming the Dragon

Gordon G. Chang December 15, 2006
Americans misunderstand their relationship with the Chinese, and that’s why little progress is made during any negotiations between the two nations, argues author Gordon Chang. The US repeatedly and mistakenly assumes that China can’t be pressured and that China has the upper hand because it holds so much US debt. Even if China were to pursue euros and yen instead of dollars, Chang argues that...

Slumping Dollar Has Nasty Surprise in Store for Lebanese Consumers

Michael Bluhm December 11, 2006
Even as Lebanon tries to avoid falling into civil war, the country’s fortunes are further imperiled by the falling US dollar. The dollar plays a prominent role in Lebanon’s economy: It is universally accepted alongside the Lebanese pound, and bank machines routinely dispense money in both pounds and dollars. Now, a weaker dollar means that Lebanese consumers can expect to pay more for goods...

Capitalism: One Size Does Not Suit All

Pranab Bardhan December 7, 2006
Uncertainty abounds over the Anglo-American economic model that has held sway ever since Adam Smith. Excessive debt, growing inequality, increasing costs for health care and retirement as well as large prison populations in the US and UK have raised doubts about its viability. Many nations have sought to adapt capitalism for their specific cultures and needs. Scandinavian and Japanese models...