In The News

The US and China: Friends or Foes? – Part II

Daniel H. Rosen April 20, 2006
The US and China are the world’s two largest economies – but the citizens of the two nations differ in terms of financial habits. For example in 2005, savings accounted for at least 30 percent of Chinese household income while the US registered no savings at all. In the second of this two-part series, economist Daniel H. Rosen analyzes the implications of China’s increasing interdependence with...

We Need Alexander Hamilton

Ernest C. Hollings March 30, 2006
Ernest Hollings, former senator of South Carolina, relies on early American history to compare the government and corporate approaches to trade. The second bill to pass through US Congress, in 1789, was a 50 percent tariff on all trade, which according to Hollings, allowed the US to develop its manufacturing and reduce dependence on Europe. Other presidents managed trade to nurture specific...

Protectionism Threatens Emerging Engine of Growth

Fred Kempe March 24, 2006
Despite inflation, debt, energy prices and terrorism, global economic growth has flourished with the help of emerging markets. Consumers in developing nations like China are increasingly spending more, approaching the levels of US consumers, and contributing to keeping economies worldwide running smoothly. But protectionist forces in the US and EU could halt the new source of growth. Worried...

US Weighs Harder Line with China on Yuan

Andrew Browne February 22, 2006
With the appreciation of China’s currency moving at an unsatisfactory pace for the Bush administration, the US is signaling that it may press the issue more forcibly. Last year the US trade deficit with China rose to $202 billion, more than a quarter of the total US deficit. A week ago, US Trade Representative Rob Portman introduced a task force that will analyze Chinese trade practices. The...

Unpopular Globalization: Why So Many Are Opposed

David Dapice February 2, 2006
The world economy has done well in recent years, yet workers in rich nations remain anxious about how globalization will affect future jobs, wages and benefits. In the US, Ford and General Motors have slashed jobs and closed plants. Plentiful skilled labor in emerging countries raises fears about depressed wages worldwide. More importantly, specific policies and conditions in Europe and the US...

Greenspan Says Globalization Driving U.S. Current Account Gap

Craig Torres November 14, 2005
The US current account deficit has skyrocketed in recent years, reaching an unprecedented 6.3 percent of Gross Domestic Product. Outgoing Federal Reserve Chairman Alan Greenspan attempted to explain the widening of that gap yesterday, arguing that the gap reflects “a pronounced new phase of globalization.” Globalization, says Greenspan, has weakened “home bias”—the tendency to invest in one’s...

The Rising Risk of a Hard Landing

Stephen Roach November 4, 2005
In 2005, America’s deficit will account for 70 per cent of the total deficit positions in the global economy, By contrast, it will take ten countries to account for 70 percent of the global surplus. While Washington wants to shift the blame, this disequilibrium is largely the result of a US economy short on savings, writes Stephen Roach, chief economist at Morgan Stanley. And because of the...