So those governments whose credit is still unshaken and whose assets are still the benchmarks of quality for the world economy should be creating a lot more of them.
The challenge now is to achieve a combination of discipline and flexibility that protects the collective interest. That will involve a loss of full fiscal sovereignty, but facing up to that reality is required to sustain the monetary union.
Despite the frequent cries of American Republicans that Barack Obama is trying to bring European-style socialism to the United States, it is now very clear that the US president wishes to govern from one place and one place only: the center.
Certainly nothing could be achieved on a timetable that would offer any comfort to the other PIGS. They would all be bacon and sausages before any agreement was reached.
For the first time, more than half of the world will have enough food not to be hungry, enough shelter not to be wet, enough clothing not to be cold, and enough medical care not to be worried that they and most of their children will die prematurely of micro-parasites.
The aftermath involves resetting asset values, deleveraging, and rehabilitating balance sheets – resulting in today's higher saving rate, significant shortfall in domestic demand, and sharp uptick in unemployment.
After wading through the drivel of ethics-free Republican hacks and knowledge-free academic hacks who claim, one way or another, that the basic principles of economics make it impossible for government spending decisions to alter the flow of economic activity, reading Barro comes as a great relief.
Should it have been allowed to rescue the insurance giant AIG so expensively, without approval by the US Congress? How is it that the Fed’s balance sheet can expand so dramatically, potentially committing large sums of taxpayer dollars, without Congress having a purchase on its decisions, except well after the event?
Withering exports and asset bubbles have forced Asians – especially China and Japan -- to work harder at free trade pacts.
Emerging markets are still the economies to watch now that the Asian Tigers have joined the boring, developed nations club.
Since a quick stimulus exit and credit clampdown appear unlikely, China's policymakers should consider backing off gradually.
Money supply growth has sparked an asset market boom that supports the economy, not the other way around. Don't get burned.
Fluctuating currency values can make or break foreign exchange traders. On a far wider scale, they affect global economic balance.
Examining the recovery paths of major industrial powers in the 1930s tells us that thoughts of reversion to normal policies -- whether monetary, exchange rate, fiscal or banking -- need to be delayed until global recovery to normal is nearly completed.
Can interest rate adjustments, currency devaluation and zigzag policymaking help unwind economic stimuli? It depends.
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