In The News

China to the Rescue: Growing Out of the Financial Crisis

Joergen Oerstroem Moeller July 28, 2009
The global financial crisis is far from over, and Joergen Oerstroem Moeller argues for a stimulation in global demand. Unfortunately, the big drivers of demand growth in the past – primarily the US, but also Japan and Europe – each face major hurdles sufficiently large to suggest they won’t be the engines of growth in the immediate future. So Moeller recommends looking to China. Critics counter...

Fading of the Dollar’s Dominance

Anthony Faiola June 26, 2009
A number of experts believe the US dollar is unlikely to retain its title as the world’s reserve currency due to structural changes in the global economy and the mounting US deficit. For instance, China appears to be taking a stronger stance on the yuan’s global role, though the currency remains relatively unusable in large international transactions. Meanwhile the International Monetary Fund is...

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...

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

Branko Milanovic May 4, 2009
The global financial crisis that has devastated the world economy has spawned a growing literature on its causes. In part one of our two-part series, World Bank economist and Carnegie Endowment scholar Branko Milanovic argues that while analysts can quibble over the contributing factors to the financial meltdown, a deeper, more fundamental problem was the real cause: income inequality. Growing...

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...

The G-20 and the Future of Capitalism – Part III

Pranab Bardhan April 3, 2009
In the third part of our series on the G-20 and the Future of Capitalism, Berkeley economics professor Pranab Bardhan suggests perhaps much to the chagrin of its naysayers, capitalism is here to stay. But chastened by the crisis, it is likely to take on a much milder form. Financial asset growth will slow; producers rather than traders will resume precedence; and financial regulation will...