The International Economy

Daily provides news, commentary, and research on international economics. The source covers global financial policy, trends, and international law.

Articles from Vol. 25, No. 3, Summer

Angela's Amateur Hour: After Nearly Wrecking Monetary Union through Inaction, Bumbling German Chancellor Merkel May Have Saved the Eurozone despite Herself
The endgame for Greece is at hand. Eurozone policymakers appear to accept that the country is insolvent. That acceptance comes "a bit late but not too late," as the Financial Times recently summed up the situation in its Lex column. A year into...
Blundering to $300 per Barrel: And the Blame for the Coming Period of Catastrophic Energy Price Volatility Will Be Widespread
Before the decade ends, U.S. consumers will be paying $10 per gallon for gasoline while on the same day others pay $0.50 per gallon for E85 (an 85:15 ethanol/gasoline blend). Before 2021, consumers in Europe will see diesel prices rise from the current...
Deception by the Boatload: The Shocking Rise of the Chinese Navy
China's announcement that its first aircraft carrier is ready to set sail as early as the end of this month has refocused attention on the country's naval ambitions. So, too, has the Pakistani defense minister's disclosure that his country recently...
Dombret Speaks: An Influential Bundesbank Policy Strategist Offers His Take on the IMF, Hedge Funds, the Rating Agencies, and the Alleged Design Flaws in Monetary Union
[ILLUSTRATION OMITTED] TIE: To what degree was the global financial crisis the result of Anglo-Saxon countries' lack of regulatory oversight and overconfidence in the efficiency of the market system? Dombret: With the benefit of hindsight, we...
Economy, Insure Thyself: In Today's Era of Natural Disasters and Economic Crises, There Is a Better Way to Manage Risk
The basic principle of financial risk management is sharing. The more broadly diversified our financial portfolios, the more people there are who share in the inevitable risks--and the less an individual is affected by any given risk. The theoretical...
Getting to Yes on Trade: The First Step Is to Establish an Effective Adjustment Policy
We are in a ridiculous state of partisan bickering. Finalizing three bilateral trade agreements ought to be an easy, no-brain way to generate jobs and growth in the U.S. economy. Yet here we are in another stalemate between the political parties, with...
Grand Bargain: Time for a Second Famous American Dinner Party
The recent spectacle of the two major political parties in the United States being unable to agree on any action that would close the gaping federal fiscal deficit--more than 9 percent of GNP--is both unedifying and bewildering. In past decades, similarly...
Has Financial Globalization Peaked? A Leading Economics Journalist Offers a Look Behind the Curtain
Wall Street is once again paying large bonuses, as hedge fund titans are hoovering up trophy assets. About 40 percent of recently minted Harvard MBAs rushed to the finance sector. In Europe, private-sector bondholders are bringing once-proud nations...
Is Financial Globalization Beginning a Process of Reversal?
Is the era of financial globalization over, or at least about to begin a significant reversal? Witness the disagreements over capital adequacy, regulation of derivatives, and the sudden questions from some non-European banks about holding European...
Natural Disasters: Economically Speaking, Are They Net Contractionary or Stimulative Events?
Witness the March 2011 triple disaster in Japan. Will the end result be a raft of new infrastructure and other spending that proves to be a net stimulus to the Japanese economy? Or has the catastrophe produced such a dark cloud of gloom over the country,...
Only the Beginning: Europe's Mess Is Even Bigger Than It Looks. and the Culprit? the Euro Itself
Europe seems to have discovered the never-ending crisis. Greece can neither pay its debts nor mount effective budget reform. Another round of rioting has forced a cabinet reshuffle. A contagion of default threatens to engulf the rest of Europe's Germany...
The Coming Multipolar World Economy: Is the Developed World Prepared?
At a time when the global economy is suffering from a crisis of confidence, structural imbalances, and subdued growth prospects, looking ahead ten years to predict the course of development requires careful modeling and something beyond sagacity. What...
The Eurozone Crisis and German History: The Lessons of Versailles
The eurozone crisis just seems to be lingering on, with no resolution in sight. Germany, in particular, is often criticized for providing no leadership. All that seems to happen is that every week brings new variants of disparaging news, from Finnish...
The Limits of Government Activism: And the Role of Risk, Liquidity, and Speculation in a Thriving Economy
In these extraordinarily turbulent times, it is not surprising that important disagreements have emerged among policymakers and economists on the issue of economic activism. Almost all agree that activist government was necessary in the immediate aftermath...
When Interest Rates Are Too Low
As the Japanese economy continues to shift away from manufacturing industries, it should more closely align itself with capital-intensive, highly productive non-manufacturing industries that will generate the greatest value for the overall economy....
Why the Dollar Will Weaken Further: And without This Decline, the U.S. Economy Is Likely Doomed
When it comes to the value of the dollar, the official mantra of the U.S. government is that "a strong dollar is good for America." Official "mantra" but not official policy. Neither the U.S. government nor the Federal Reserve does anything to strengthen...