The Cato Journal

The Cato Journal is a leading free-market public policy journal. The Cato Journal features articles discussing politics and the economy of interest to scholars and professionals but accessible to a general audience as well.

Articles from Vol. 23, No. 1, Spring-Summer

Alternative Approaches to Sovereign Debt Restructuring
Serious gaps exist in the means available to deal with sovereign debt crises. In recent cases of sovereign default, both the debtor country and its creditors have paid large costs, in terms of lost economic activity and income and lost value of claims....
Argentina 2002: A Case of Government Failure
In the aftermath of the Argentine default and devaluation, the Argentine government did little or nothing to alleviate its deep crisis and much to make it worse. The unemployment rate exceeded 20 percent, more than a million people emigrated--a sure...
Banking Stability and the Basel Capital Standards
In thinking about bank stability and the Basel Accord, rather than concentrating on whether the Basel Committee has gotten every little detail of the new Accord right--a task that can greatly affect banks' bottom lines--it is more appropriate for our...
Crises and Recoveries: Multinational Failures and National Successes
The overused phrase "economic crisis" became surprisingly familiar over the past decade, being more often used than the word "panic" a century ago. The more the International Monetary Fund attempted to predict and repair economic crises, the more unpredictable...
Currency Competition and Consumer-Driven Unification
What is meant by "currency competition?" In Northern Ireland today, most of the paper currency is privately issued. The banknote currency issued by the Ulster Bank competes against the currencies of three other commercial banks (the Northern Bank,...
Currency Competition: The British Debate
Earlier History It would probably be best for me to concentrate on the recent British debate. Not only do I know it best, but I do not think that the earlier debates on free banking in previous centuries in various countries have any very direct...
Do Sovereign Debtors Need a Bankruptcy Law?
The idea that there is a "gaping hole" in the architecture of the international financial system that should be filled by a universal bankruptcy tribunal is not credible. For centuries, sovereign debt defaults have been resolved without the benefit...
Enhancing Sovereign Debt Restructuring
Since the early 1980s, patterns of emerging market finance have changed significantly. Greater integration of capital markets and a trend toward a greater use of direct lending through bonds has led to relatively decreased use of indirect finance through...
Increasing Economic Growth and Stability in Emerging Markets
Ownership, Growth, and Stability The Bush administration's emerging market strategy is an interrelated part of our overall international economic agenda. The agenda focuses on two goals: increasing economic growth and increasing economic stability...
Introduction: International Financial Crisis: What Role for Government?
If investment flows are to continue to emerging economics, a new means must be found to bring predictability to the resolution of unsustainable sovereign debt. But will this be imposed by flat or evolve though market forces? Will the IMF return to...
Lessons from Argentina and Brazil
What have we learned from the sovereign debt crises in Argentina and Brazil, and what can the United States and the International Monetary Fund do, if anything, to repair the damage, and to avoid similar problems elsewhere? Policy Lessons I would...
On the Fed's Demand Bubble
It should now be clear that the Federal Reserve caused, or at least accommodated, the bubble in aggregate nominal demand from early 1998 through early 2000. Moreover, the Federal Reserve chose to wring out this excess demand by late 2001, and by late...
Promoting Financial Resilience
Despite the fact that periodic surges in volatility are a fact of life in financial markets, I think there is general acknowledgment that recent years have been extraordinary in this regard. This has been a period of historic change and remarkable...
The Argentine Economic Crisis
The Argentine economy suffered a deep crisis during 2001 and 2002. Poverty stretched to one in every three homesteads in the suburbs of Buenos Aires, and the traumatic departure from convertibility, together with financial crisis and default (public...
The Argentine Straw Man: A Response to Currency Board Critics
It is noticeable, on the one hand, that a large part of the best work on Money is topical. It has been prompted by particular episodes, by particular experiences of the writer's own time. --Sir John Hicks (1967: 156) Sir John certainly would...
The Roadblock to a Sovereign Bankruptcy Law
Bankruptcy law is a necessary feature of a modern economy, and the principles for a bankruptcy apply whether the debtor happens to be a sovereign or not. The essential point is that markets cannot handle situations of extreme financial distress or...
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