May 16, 2012

Is Europe on a cross of gold?

Increasingly, one hears predictions that the euro will go the way of the gold standard in the 1930s. And, increasingly, the reasoning behind such forecasts seems persuasive. But does that mean that the euro doomsayers are right? Following the 1929 stock market crash, Europe ...

Apr 18, 2012

The ECB's lethal monetary inhibition

Europe’s financial system on the brink of disaster, the European Central Bank stunned the markets with an unprecedented intervention, offering banks across the eurozone essentially unlimited liquidity against any and all collateral for an exceptional period of three years. The ECB’s surprise liquidity operation ...

Mar 15, 2012

Europe's trust deficit undermines crisis resolution

There is no shortage of talk nowadays about Europe’s deficits and the need to correct them. Critics point to governments’ gaping budget deficits. They cite the southern European countries’ chronic external deficits. They highlight the eurozone’s institutional deficits — a single currency and a ...

Dec 14, 2011

2012: the year of muddling

Nowadays there is no shortage of pundits, economic or otherwise, warning of impending disaster. If right, they are hailed as seers; if wrong, chances are that no one will remember. So here’s a forecast: There will be no shortage of predictions that 2012 is ...

Aug 18, 2011

What can take the dollar's place?

For more than a half-century, the dollar has been not only America’s currency, but the world’s as well. It has been the dominant unit used in cross-border transactions and the principal asset held as reserves by central banks and governments. But, already before the ...

Jul 20, 2011

A Greek Marshall Plan makes sense

It should now be clear to even the most blinkered observer that the Greek economy is in desperate need of help. Unemployment is 16 percent and rising. Even after a year of excruciating spending cuts, the budget deficit still exceeds 10 percent of GDP. ...

Jun 15, 2011

The U.S. Federal Reserve is playing with fire

The dollar has had its ups and downs, but the downs have clearly dominated of late. The greenback has lost more than a quarter of its value against other currencies, adjusted for inflation, over the last decade. It is down by nearly 5 percent ...

Apr 15, 2011

Safer alternative bears on dollar

BERKELEY, Calif. — This is the season for international monetary conferences. In March, national leaders assembled in Nanjing, China, to speechify on exchange and interest rates. And, in early April, leading thinkers and former policymakers met in Bretton Woods, New Hampshire, the birthplace in ...

Mar 13, 2011

Is the world ready for a China slowdown?

BERKELEY, Calif. — With the world’s rich countries still hung over from the financial crisis, the global economy has come to depend on emerging markets to drive growth. Increasingly, machinery exporters, energy suppliers and raw-materials producers alike look to China and other fast-growing developing ...

Feb 12, 2011

Egypt should worry China

BERKELEY, Calif. — A strictly economic interpretation of events in Tunisia and Egypt would be too simplistic — however tempting such an exercise is for an economist. That said, there is no question that the upheavals in both countries — and elsewhere in the ...