In The News

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...

Going Off to College for Less (Passport Required)

Tamar Lewin December 11, 2008
Higher education has become a global commodity, and students seek out both great bargains and the very best of brand names, reports Tamar Lewin for the New York Times. “Universities worldwide – many of them in Canada and England – are competing for the same pool of affluent, well-qualified students, and more American students are heading overseas not just for a semester abroad, but for their...

That Sinking Feeling: Global Crisis Hits Shipping Industry Hard

Thomas Schulz December 10, 2008
A global recession has hit the shipping industry hard, reducing rates and jobs. Products, from the most sophisticated electronics and cars to raw materials like iron ore, are piling up on docks, as consumers close their wallets. Financing has just about vanished for new ships, and analysts question whether the current crisis is part of a typical boom-and-bust cycle, explains Thomas Schulz in...

Japan's Doing Better Than You Think

Philip Bowring December 5, 2008
Financial analysts in the West often point to Japan as an example of what not to do during an economic downturn. “[A]voidance of the Japan experience with deflation is often given as a reason for the United States, the United Kingdom and the Eurozone as a whole (trying to drag Germany with it) to justify almost any level of bailout-outs and fiscal stimulus to revive their economies,” explains...

The Local Syndrome

Nayan Chanda December 3, 2008
The global economy is in a shambles, due to a credit crunch, uncertain values of homes and other assets, and complex loan packages that few people understand. US President George Bush convened a meeting of 20 major economies and acknowledged that emerging economies like China, India and Brazil deserve a role in any institutions that monitor the global economy, that protectionism and nationalism...