In The News

The Global Debt Bomb

Daniel Fisher January 25, 2010
Countries around the world took on massive amounts of debt in in the last two years to help fend off economic disaster by bailing out banks and fostering growth. But in many cases, this has worsened a pre-existing debt problem and raised debt-to-GDP ratios to astronomical levels. How all this debt will be paid off remains uncertain: an economy needs to grow fast enough to allow the government to...

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...

China Turns a Corner as Spending Takes Hold

Andrew Batson April 13, 2009
Recent data suggests that China’s economy may have bottomed: crude oil imports are up; steel mills are importing record amounts of iron ore; and the Shanghai Composite index is up over 32 percent year to date. It would appear Beijing’s stimulus program is having an effect. The fact that China remains partially a command economy has allowed the stimulus program to take effect more quickly...

The Real Summit has been Between China and the US

Hamish McRae April 2, 2009
Posturing and theatrics aside, the most discussed issues of the G-20 summit – tax havens, financial regulation, or the IMF’s voting powers – are of marginal importance at best. The crying need of the hour is to ensure that the current financial crisis does not worsen: a difficult task given that governments so far have tended to exacerbate, rather than solve, recessions. This means governments...

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

Jeffrey E. Garten March 30, 2009
The world’s eye will be on the summit of the Group of 20 meeting in London on April 2. As the member nations – from Argentina to the United States – represent 80 percent of world trade, their decision will have an immediate and direct bearing on the global economic recession roiling the world. Doubts and anger emerge in nations that have long embraced capitalistic principles and free and open...

In Toyota City, Japan, the Good Times Rolled…Away

John M. Glionna March 25, 2009
Many analysts predicted problems with excessive debt and sub-prime mortgages in the US, but few expected that the woes would rapidly spill over into the world’s most successful companies. The global economic recession hits hard at company towns like Toyota City in Japan: “Unlike in Detroit, where years of steady decline preceded the current financial crisis, Toyota City's fortunes went from...