With German Chancellor Angela Merkel setting conditions for the eurozone, France’s ambition to dominate European policy has been thwarted.
The failure of Doha will virtually halt multilateral trade liberalization for years to come.
China’s real core interests are not in territorial expansion and hegemony over its neighbors, but in upholding the human rights and improving the welfare of its own citizens, which is the world’s core interest in China.
Developing countries have learned over time that real income growth and employment expansion are driven by productivity gains, not exchange-rate movements.
With the US, and now Europe, facing long roads to recovery, Asia’s emerging economies can no longer afford to count on solid growth in external demand from the advanced countries to sustain economic development.
A commitment conditional on reform progress will not bring back private investors immediately. Only bold and largely unconditional commitments by both the European Union and Italy can break this dangerous impasse.
Academic studies suggest that the top tenth percentile of income distribution in the US, and elsewhere, is also moving farther away from the median earner.
Perhaps the most astonishing thing about the ECB’s monochromatic price-stability mission and utter disregard for financial stability is its radical departure from the central-banking tradition.
While the United States runs a large trade deficit with China, it also runs deficits with 87 other countries. A multilateral deficit cannot be fixed by putting pressure on one of its bilateral components.
In short, economies and policies adjusted in an unsustainable fashion, to some extent obscuring the need for a more sustainable pattern of adaptation.
The argument for a measured deficit-reduction program is to buy time for the structural shifts that will expand accessible external demand and fill in the gap in aggregate demand.
Government plays a central role in financing the services that people want, like education and health care.
Fixed investment in China is close to 50% of GDP – which must be a world record. Credit to state firms and to households continues to grow rapidly. Isn’t this a version of exactly what derailed Japanese growth?
Investment managers have a moral and professional responsibility to play their role in bringing some discipline into the banking system.
With retrenchment and balance-sheet repair only in its early stages, the zombie-like behavior of American consumers should persist.
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