In The News

Reverse Outsourcing

Nayan Chanda July 6, 2010
An old saying – what goes around comes around – applies to anything global, and that includes outsourcing. France and other developed nations with high labor costs have long and bitterly complained about jobs shifting to low-wage nations like China. But Europe’s rising unemployment, combined with rising wages in China, contribute to an agreement that brings up to 50 Chinese electronics and light-...

Germany's Export Boom Has Trade Partners Stewing

Armin Mahler, Christian Reiermann, Wolfgang Reuter, Janko Tietz June 30, 2010
Fortunes turn quickly, and the experience of German manufacturers shows that some firms emerge from recession with renewed strength. But global trade partners that rely on deficit spending claim that German prosperity comes at others’ expense, as suggests this Spiegel Online article. Critics complain that a weak euro, German wage stability and failure to stimulate domestic demand decrease the...

Ahmadinejad’s Sugar Daddy

Gal Luft June 10, 2010
The Brazilian government is developing closer ties to Iran, even as Iran faces stringent economic sanctions for its nuclear program. By exporting ethanol, President Lula da Silva’s government seeks to help Iran, a major oil exporter that lacks refinery capacity, lessen its dependence on foreign gasoline. Assisting Iran complicates Brazil's relationship with the United States, one of the...

As Growth in US Slows, Wal-Mart Puts More Emphasis on Foreign Stores

Ylan Q. Mui June 10, 2010
Wal-Mart, the world’s largest retailer, pursues ambitious foreign expansion to make up for lagging sales in the United States. While no single country could replace the US in terms of consumer power, developing nations are poised for economic growth. Wal-Mart caters to newly-empowered consumers in emerging economies, a business model much like the firm’s “early strategy of building stores in a...

Unless Two Imbalances Can Be Fixed, Two New Crises Will Follow This One

Irwin Stelzer June 8, 2010
Huge trade imbalances, particularly between China and the US, Germany and the rest of Europe, ensure low interest rates and ongoing bubbles, contends Irwin Stelzer of the Hudson Institute. Ongoing lending at low rates to nations already steeped in debt dulls incentives to increase competitiveness and reduce trade deficits as well. “‘Imbalance’ is the word, and it creates multiple threats to the...

When Banks Don't Trust Banks

Pierre Paulden June 3, 2010
Trust breaks down in banking when investors question whether deposits are safe and when banks worry about loan repayment. Banks only keep a percentage of cash on hand, and a lack of trust can disrupt efficient lending and borrowing with that limited cash. Global banks could have a capital deficit of $1.5 trillion, by some reports, and troubled banks could request additional government assistance...

Wanted: Competent Leaders With Vision To Tackle Global Crises

Jeffrey E. Garten June 3, 2010
Markets around the globe analyze and quantify risk. But governance and politics present too much uncertainty, and investors are increasingly troubled by governments’ inability to address pressing problems and coordinate responses to problems including climate change, massive debt of any one country and other imbalances. Because of countless interconnections through labor, capital, environment,...