In The News

Fed Casts Shadow Over India, Emerging Narkets

Mandakini Gahlot August 28, 2013
The US Federal Reserve has signaled intentions to reduce a huge bond-buying program that has pumped the US economy with stimulus funding. This in turn is prompting currency values to fall in emerging economies. Speculating that US interest rates may rise, investors are pulling money away from foreign investments in favor of US bonds. As a result, the rupee has fallen to a historic low in relation...

China’s American Bailout?

Alexander Friedman August 26, 2013
The US economy focuses on spending, and the Chinese economy largely focuses on saving and lending to the US – “a pattern that has suppressed global interest rates, helped to reflate the developed world’s leverage bubble, and, through its impact on the currency market, fueled China’s meteoric rise,” suggests investment banker Alexander Friedman writing for Project Syndicate. He points out the...

How the Wealthy Keep Themselves on Top

Tim Harford August 20, 2013
Inequality is pronounced and widening, particularly in the United States and the United Kingdom, but also Australia and Canada. People tend to care more about inequality during times of economic crisis, suggests Tim Harford. “The uncomfortable truth is that market forces – that is, the result of freely agreed contracts – are probably behind much of the rise in inequality,” he writes for the...

Don’t Cry For Me, Motown

Nayan Chanda August 19, 2013
Detroit was a US auto manufacturing center a few decades ago, but now its population of 700,000, down from 2 million, cannot afford to pay off $18 billion in debt and unfunded liabilities. The city has filed for bankruptcy. “Outsourcing, automation and suburbanisation have drained its population” and “the bankruptcy of what used to be the country’s fourth-largest city does indeed signal the...

Rise of the Renting, Sharing Economy Could Have Ripple Effects

Matthew Boesler August 16, 2013
The global debt crisis devastated job and wage prospects for many young adults in the world’s wealthiest nations. But many young adults have adapted and are content to live with less: They’re in no hurry to purchase homes or take on debt, instead renting modest apartments and sharing services like wireless; they prefer living close to work, avoiding cars and long commutes; when they travel, they...

Slowdown in China Isn’t Bad News

Michael Pettis August 13, 2013
The Chinese economy is inevitably slowing. This doesn’t mean doom for the global economy or even China’s. Much depends on how Chinese leaders rebalance the economy, and signs so far point to a smooth transition, explains Michael Pettis, author, finance professor at the University of Peking and senior associate at the Carnegie Endowment for International Peace. Orderly rebalancing entails...

This Is Not Time to Slap Iran

Trudy Rubin August 12, 2013
A vote in the US House of Representatives in favor of harsher economic sanctions for Iran, days before the president’s inauguration, could be counterproductive, explains Trudy Rubin of the Philadelphia Inquirer. She urges the US should try negotiations before the Senate votes, considering that sanctions have only hurt the Iranian economy and not deterred the nuclear program. Critics suggest that...