In The News

Democrats Push Obama for Smaller Tax Cut in Stimulus Package

Peter Nicholas January 10, 2009
President Barack Obama faces pressure from his own party to adjust a government economic stimulus plan of $775 billion, reducing tax cuts and spending more on road, bridge and infrastructure construction. The US politicians anticipate that some combination of spending and tax cuts could increase US confidence and improve the overall economy. But tax cuts and spending will also add to the US debt...

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...

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,...

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-...

Obama’s First Trip Abroad Should Be to China

Jeffrey E. Garten December 12, 2008
President-elect Barack Obama confronts a daunting array of immediate economic and security challenges. But that does not mean the Obama administration should neglect building stronger ties with China, urges Jeffrey Garten, international trade and finance professor at Yale and a former US undersecretary of commerce for international trade. China and the US need each other to boost a weakened...

Switzerland Pays Price for Isolationism

Joshua Gallu December 5, 2008
Switzerland has long been known as “a custodian of the world’s wealth,” but the recent credit crunch has hit all banks hard and Swiss policies of isolation have not made the nation immune against effects of the economic downturn. The Swiss franc is losing value to the dollar, and the Swiss economy is expected to contract. Swiss bank UBS faced the biggest losses in Europe and had to be aided with...