Unless entitlements are substantially reformed, the U.S. will likely default on its debt; not in conventional ways, but via inflation, currency devaluation and low to negative real interest rates.
- Reviving a Policy Marriage
Given modern financial systems' demonstrated ability to create (and destroy) liquidity endogenously, financial and macroeconomic stability may become more difficult to achieve if monetary instruments and macroprudential tools are not used in a consistent manner.
- Democracy or Finance?
Unfortunately, political disunity in the face of financial pressure always ends up being far more damaging to democracy and the economy than instinctive patriotism.
- Innocent Bystanders
A better system to rebalance the world economy is as necessary as it is unlikely. All we can look forward to is the next G-20 communiqué.
- China Should Import Deflation
Reconciling growth and fighting inflation is not impossible, but it does require that the government overcome its deep-seated suspicion of opening China's markets to imports.
- Damming Capital
The new IMF framework is welcome, but countries will need the freedom to manage their capital account more than ever in the years ahead.
- China Targets at Annualized Wage Rise of 15Pct
Labor cost in China will continue on the rise, as the government aims at an annualized pay rise of 15 percent, and promises to double workers' wages during the 12th five-year plan that lasts from 2011 to 2015.
- How Risky is the Global Economy?
Global economy is caught in a duel between healing and disruptive influences, in which it can ill afford any further intensification of the latter.
- Reforming Bank Reform
By providing an honest, rigorous assessment of the major reform proposals, the Independent Banking Commission has performed an invaluable service, and deserves recognition for a job elegantly done.
- Chinese Social Network Files for U.S. IPO
China’s largest social network, Renren, has filed for a U.S. IPO to raise up to 58.4 billion U.S. dollars, the first of the country’s networking sites aiming to tap the U.S. capital market.