Over the past decade, Chinese trade revenues, savings and purchases of US debt increased. Low interest rates encouraged US consumers to spend and housing prices soared. But such imbalances could not be sustained and financial instruments containing mortgages for homes that have lost their value, have proven toxic for the world. Economists and central bankers are still struggling to find a way out of the subprime mortgage crisis. If Japan’s lost decade offers lessons, then deflation must be averted at all costs if there is to be hope for a recovery.. But for the long-run, one magical phrase emerges from experts and that’s “stricter regulations for the banking industry.” Once governments succeed in restoring consumer and investor confidence, they should focus on designing regulations that encourage responsibility and a long-term outlook. Furthermore, policymakers have to recognize the need for global oversight of the banking industry, either by strengthening existing institutions or by creating new international authorities. The timing of the rescue is uncertain, and the certainty of its efficacy remains in question. To put the matter in historical perspective, there is still no consensus on whether government spending policies of Franklin D. Roosevelt or increased demand for goods created by Second World War pulled the United States out of the Great Depression. One certainty for this crisis: there are no localized solutions for a problem that extends throughout the world.

We Can’t Undo Globalization, But Can Improve It

Job hunters should relocate, and companies could expand export capability
Gary Pinkus, James Manyika and Sree Ramaswamy
January 10, 2017

Rethinking Labor Mobility

Mobility is not simply relocating, and requires new social and psychological mindsets
Harold James
January 4, 2017

Globalization Has Done a Lot of Great Things for Americans

Benefits include innovation and low prices
Panos Mourdoukoutas
January 4, 2017

Emerging Market Investors Prepare to Buckle Up for 2017

Worries include rising interest rates and protectionist policies from developed nations
Roger Blitz and Elaine Moore
January 2, 2017

How to Cure the Globalization Backlash

The developed world has lost its confidence
Harold Sirkin
December 23, 2016

China Central Bank Extends Emergency Loans to Financial Firms

Local and global factors contribute to a massive credit crunch
Rachel Rosenthal and Yifan Xie
December 22, 2016

US Federal Reserve Raises Rates

Other countries rely on low, even negative, rates to protect economies
Harriet Torry
December 14, 2016