In The News

Why Do We Value Gold?

Justin Rowlatt December 23, 2013
Historically, governments and investors have revered gold. Justin Rowlatt of the BBC News questions the reasons behind this value while also reporting on the British Museum’s exhibition on pre-Columbian gold artifacts. A chemistry professor quoted in the story points out that gold is distinctive. Gases, alkaline metals and other elements are simply too unstable or difficult to smelt. Gold is...

Worries About the World Economy for 2014

David Dapice December 20, 2013
Uncertainty and uneasy interdependence characterize a 2014 forecast on global economic growth. High rates of unemployment persist in developed economies while emerging economies rely on those nations for exports and jobs for their own citizens. The International Monetary Fund forecasts 3.5 percent growth for 2014 – or less – and economist David Dapice analyzes factors that could hamper that...

America’s Role as Consumer of Last Resort Goes Missing

Simon Kennedy December 16, 2013
Household final consumption represents about 70 percent of US gross domestic product, yet “Cheaper fuel and raw materials are boosting manufacturing, making the U.S. more of a competitor to emerging-markets nations and less a reliable consumer of their goods,” reports Simon Kennedy for Bloomberg. The US recorded its lowest current-account deficit since 1999, assisted by new supplies of domestic...

Global Experts Still Need Local Knowledge

Pranab Bardhan December 12, 2013
Many professions have gone global, as leading researchers hunt for global patterns, develop global indices and make global pronouncements. Economist Pranab Bardhan analyzes this trend in the field of economic development, and points out, “With the advance of such ‘global practices’ what gets short shrift is the old-fashioned in-depth study into the historical-institutional contexts of particular...

How to Avert Another Debt-Ceiling Crisis

James Leitner, Ian Shapiro November 15, 2013
The United States borrows 46 cents for every dollar it spends, and despite congressional approval of the expenditures, a few members cling to a self-imposed debt ceiling, insisting that partial default may bring new discipline and spending priorities. “Had the debt ceiling been breached, the damage to the U.S. and world economies could have been measured in trillions of dollars,” write James...

The Perils of Falling Inflation

November 12, 2013
Central banks are national institutions that regulate currency and monetary policy. Typically, they are on watch against excessive inflation which can erode currency values. But low inflation that transforms into deflation may be a bigger problem. “As Japan’s experience shows, deflation is both deeply damaging and hard to escape in weak economies with high debts,” warns the Economist. “Since...

The Danger of High Home Ownership: Greater Unemployment

David G. Blanchflower and Andrew J. Oswald November 4, 2013
Home ownership is a common goal for societies and individuals. Yet statistical patterns suggest that a high rate of “home ownership weakens the vitality of the labour market and slowly grinds out greater rates of joblessness,” report economists David G. Blanchflower and Andrew J. Oswald in a paper for Chatham House. Home ownership may disrupt efficient functioning of the labor market by reducing...