In The News

China Takes Aim at Dollar

Andrew Batson March 25, 2009
China has proposed that a new currency gradually replace the US dollar as the world standard, reports the Wall Street Journal. The proposal from Zhou Xiaochuan, governor of People’s Bank of China, could reflect a desire to straighten out global finances and frustration over dependence on the US – as well as a warning about Chinese impatience over funding immense US debt. China has $2 trillion in...

World Economy: What Went Wrong

March 23, 2009
The IMF concludes that a lack of regulation – not global imbalances – led to crisis, and “the distinction has important consequences for whether macroeconomic policy or more regulation of financial markets will provide the solutions to the mess,” reports the Economist. Economists examine the root causes, comparing problems to previous crises to develop solutions and prevent repeats. “The IMF...

How Washington Can Prevent “Zombie Banks”

James Baker March 10, 2009
The word “zombie” describes a corpse-like being, under a spell that allows it to move about, but not undertake any deliberate or meaningful action on its own. Such is the term used by former James Baker, former US treasury secretary, to describe banks that accept huge government bailouts, but don’t go about the business of lending. When Japan suffered economic collapse in 1990, the US sternly...

A Textile Capital of China Is Hobbled by a Downturn Gone Global

David Barboza March 10, 2009
The world’s largest economy that once thrived on consumption took a sudden turn to thriftiness. But a global slowdown in spending has hurt factory towns in China that once packed US closets at low prices. Thousands of workers have lost jobs and two out of every three textile and apparel factories in China could go out of business, reports David Barboza for the New York Times. “Experts say that...

Fixing Global Finance: An Interview with Martin Wolf

March 5, 2009
Martin Wolf, Chief Economics Commentator and Associate Editor for the Financial Times, talks about his new book “Fixing Global Finance,” and the current financial crisis. In this interview with Nayan Chanda, editor of YaleGlobal, Wolf explains why global imbalances caused the financial crises, outlines the steps for ending this destructive cycle, and offers suggestions on how to help ensure...

Mounting US Debt Burden Threatens Poorer Nations

David Dapice March 2, 2009
US prices ballooned, and then burst. Now the government must borrow heavily once again to stave off an abrupt collapse in values and demand. Such heavy borrowing, 12 percent of the country's GDP this year, depends on the willingness of other countries to buy US debt. But solvent countries and sovereign wealth funds are nervous about their own stockpiles and the health of the global economy:...

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....