In The News

The Crisis Gives the US New Financial Power

Ricardo Hausmann December 19, 2008
The global financial crisis has reduced savings of the world’s wealthiest nations, but that does not necessarily reduce their power, suggests Ricardo Hausmann, director of Harvard’s Center for International Development, in an essay for the Financial Times. Nations can retain power, depending on how they borrow or spend. “The financial meltdown has translated into a sudden stop in capital flows to...

Emerging Economies to Reap From Global Crisis

Dani Rodrik December 19, 2008
Because of the global economic crisis, emerging economies will gain more power in global institutions, as the crisis has diminished both financial and political influence for the US and Europe. Emerging economies like South Korea, Brazil, India and China command a greater share of the global economy, and the developing nations must prepare for their new role, advises Dani Rodrik, political...

Divergence Grows Between China and the West – Part I

Xu Sitao December 18, 2008
The international community hopes that China steps up as a global leader on a wide array of crises. But the West is then taken aback when China goes about pursuing policy with seeming unconcern about the world. This YaleGlobal series analyzes the growing divergence between China and the West over two issues – the global economic crisis and festering discontent in Tibet. Due to trade imbalances,...

Global Car Industry Fearful for Detroit

Nelson D. Schwartz December 16, 2008
Overseas operations have long helped carry the US car companies through hard times. But the current economic crisis is especially severe, as US car companies confront mounting health-care costs and reduced credit, an abrupt reduction in demand for oversized vehicles, volatile fuel prices which influence consumer choices, and a home base of customers who have sharply curtailed their expenditures....

Mortgages May Be Toxic, But US Treasuries Appear a Safe Haven

Ashok Bardhan December 16, 2008
While the US financial markets were the source behind global credit calamity and still present tremendous uncertainty, foreign investors continue to demonstrate trust in US government institutions by increasing investments in US Treasuries. That trust gives policymakers time and space to work on significant imbalances in the areas of currency exchange rates, deficits and trade, explains Berkeley...

Asia Faces a Tough 2009 as Output Decreases

Michael Pettis December 15, 2008
Nations that engage in trading are not immune from the global economic crisis, as it spreads first throughout the trade-deficit, consumption nations and then on to the trade-surplus, producer nations, explains finance professor Michael Pettis for the Financial Times. Pettis offers three ways for the global economy to adjust: The rich countries can continue borrowing and consuming, or the trade-...

In China, Anger Rises as Economy Falls

Barbara Demick December 15, 2008
A global economic downturn prompted consumers in the West to slow spending, disrupting hiring and payroll in China and sparking sporadic protests, reports Barbara Demick for the Los Angles Times. China’s growth and employment rates still surpass those in the US, yet any economic slowdown “could present the leadership with its biggest political challenge since the student protests at Tiananmen...