In The News

The Tale of Globalization’s Exiles

Richard Lapper August 30, 2007
Media and government reports focus on hedge funds and other mechanisms of finance that move money around the globe. But individuals also shift funds, including small amounts sent in envelopes or by wire, from immigrant workers in wealthy nations to poor relatives back home. For some poor nations, the total of such remittances outweigh foreign aid or revenues earned from leading agricultural...

Amid the Mortgage Defaults, America's Day of Reckoning

Joseph E. Stiglitz August 22, 2007
As President George W. Bush’s tax cut for the rich did not help to stimulate a lagging economy during the 2001 recession, the Fed sought to lift by a drastic interest rate cut. Unfortunately, this only made matters worse as more Americans went into large debt. In recent years, lured by "subprime" mortgages and "teaser rates," many Americans overextended themselves, resulting...

Sovereign Wealth to the Rescue

Michael Pettis August 20, 2007
A US consumption spree has spawned a global savings glut, and nations such as China and Japan with large reserves of cash still hope for sizable returns. “Every period of globalization in the past has had its origins in one or more events that gave a big boost to global liquidity,” writes finance professor Michael Pettis for the Wall Street Journal. “As liquidity expanded and risk appetite rose,...

US Mortgage Crisis Hits Pacific Rim Markets

Carter Dougherty August 7, 2007
Lured by low adjustable-interest rates, US homeowners bought larger homes than many could afford. Mortgage companies bundled those loans into bond packages, selling them to investors worldwide. But the credit was too easy, and wages are stagnant for many. For homeowners who can’t handle automatic rate increases, loans go into default. Trying to sell homes and escape the trap, homeowners discover...

Summer of Setbacks

Ernesto Zedillo August 1, 2007
Summer of 2007 may well be remembered for a string of bad financial news: increasing numbers of homeowners in the US struggling to pay home mortgages, the decline of the US dollar, and climbing oil prices as conflict and tension linger in the Middle East. Yet the world economy flourishes despite shocks in foreign exchange and the debt markets. Ernesto Zedillo, director of Yale Center for the...

Globalization Study Moves Past Rhetoric

David Wessel July 27, 2007
Corporations have long insisted that globalization delivers prosperity. But a report commissioned by the Financial Services Forum, an association of CEOs of 20 major financial firms, admits that most benefits have gone to a select few. International operations increasingly account for most sales and business conducted by multinational firms, writes David Wessel for the Wall Street Journal. But...

Does the UN Still Matter?

Joseph S. Nye July 27, 2007
The United Nations, with 192 member nations, has global authority to take action on problems ranging from climate change and famine to security matters. However, when corruption or problems emerge, such as former Iraq leader Saddam Hussein removing funds from the UN oil-for-food program, designed to protect ordinary Iraqis against international economic sanctions, many nations quickly blame the...