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Will Governmental Folly Now Allow for a Cyber Crisis?
by Kenneth Rogoff of Project Syndicate,
When the financial crisis of 2008 hit, many shocked critics asked why markets, regulators, and financial experts failed to see it coming. Today, one might ask the same question about the global economys vulnerability to cyber-attack; indeed, the parallels between financial crises and the threat of cyber meltdowns are striking.
The Euro's Latest Reprieve
by Joseph Stiglitz of Project Syndicate,
Like an inmate on death row, the euro has received another last-minute stay of execution. The markets are celebrating, as they have after each of the many euro crisis summits until they come to understand that the fundamental problems have yet to be addressed.
Will Europe Be Willing but Disabled?
The eurozone crisis might break European leaders inherent resistance to compromise, collaboration, and common action. But the longer they bicker and dither, the greater the risk that what they gain in willingness will be lost to incapacity. When it comes to describing Europes ever-worsening crisis, metaphors abound.
The Great American Mirage
by Stephen Roach of Project Syndicate,
In September 1998, during the depths of the Asian financial crisis, the US Federal Reserves then-chairman, Alan Greenspan, had a simple message: the US is not an oasis of prosperity in an otherwise struggling world. Greenspans point is even closer to the mark today than it was back then.
How Europe Can Rescue Europe
by George Soros of Project Syndicate,
German Chancellor Angela Merkel argues that it is against the rules to use the European Central Bank to solve eurozone countries fiscal problems and she is right. The upcoming EU summit is missing an important agenda item: a European Fiscal Authority that, in partnership with the ECB, could do what the ECB cannot do on its own.
A Global Perfect Storm
by Nouriel Roubini of Project Syndicate,
Dark, lowering financial and economic clouds are, it seems, rolling in from every direction: the eurozone, the United States, China, and elsewhere. Indeed, the global economy in 2013 could be a very difficult environment in which to find shelter. For starters, the eurozone crisis is worsening, as the euro remains too strong, front-loaded fiscal austerity deepens recession in many member countries, and a credit crunch in the periphery and high oil prices undermine prospects of recovery.
The Accidental Empire
by George Soros of Project Syndicate,
Germany is likely to do what is necessary to preserve the euro but nothing more resulting in a German-dominated eurozone in which the divergence between creditor and debtor countries continues to widen. The EU would then become a German empire with a permanently depressed peripheral hinterland in need of constant transfer payments.
The Price of Inequality
by Joseph Stiglitz of Project Syndicate,
America likes to think of itself as a land of opportunity, and others view it in much the same light. But, while we can all think of examples of Americans who rose to the top on their own, what really matters are the statistics: to what extent do an individuals life chances depend on the income and education of his or her parents? Nowadays, these numbers show that the American dream is a myth. There is less equality of opportunity in the United States today than there is in Europe or, indeed, in any advanced industrial country for which there are data.
Is America Healing Fast Enough?
Six internal factors suggest that the United States economy is slowly healing. For some observers, these factors were deemed sufficient to form the critical mass needed to propel the economy into escape velocity. While I hoped that they might be proven right, the recent stream of weak economic data, including Mays timid net job creation of only 69,000, confirmed my doubts.
Is Global Financial Reform Possible?
by Paul Volcker of Project Syndicate,
Nowadays there is ample evidence that financial systems, whether in Asia in the 1990s or a decade later in the United States and Europe, are vulnerable to breakdowns. The cost in interrupted growth and unemployment has been intolerably large. But, in the absence of international consensus on some key points, reform will be greatly weakened, if not aborted.
Austerity and Debt Realism
by Kenneth Rogoff of Project Syndicate,
With many of todays advanced economies near or approaching the 90%-of-GDP level that loosely marks high-debt periods, expanding todays already large deficits is a risky proposition, not the cost-free strategy that many advocate. On the contrary, the impact of prolonged high debt levels on long-term growth is likely to be profound.
Asia Exposed
by Stephen Roach of Project Syndicate,
For the second time in less than four years, Asia is being hit with a major external demand shock. This time it is from Europe, with financial and trade linkages leaving Asia highly vulnerable to a raging sovereign-debt crisis that threatens to turn a mild recession into something far worse. There are no oases of prosperity in a crisis-prone globalized world. That is equally true for Asia, the worlds fastest-growing region.
My Speech to the Finance Graduates
At this time of year, at graduation ceremonies in America and elsewhere, those about to leave university often hear some final words of advice before receiving their diplomas. For those contemplating a career in finance or related careers in insurance, accounting, auditing, law, or corporate management the message is simple: the world needs you to reinvent the industry.
Who is Responsible for the Greek Tragedy?
With a traumatic implosion economic, financial, political, and social now taking place in Greece, we should expect heated debate about who is to blame for the country's deepening misery. There are four suspects all of them involved in the spectacular boom that preceded what will prove to be an even more remarkable bust.
Greece Must Exit
by Nouriel Roubini of Project Syndicate,
The Greek euro tragedy is reaching its final act: it is clear that either this year or next, Greece is highly likely to default on its debt and exit the eurozone.Like a doomed marriage, it is better to have rules for the inevitable breakup that make separation less costly to both sides.
After Austerity
So many economies are vulnerable to natural disasters earthquakes, floods, typhoons, hurricanes, tsunamis that adding a man-made disaster is all the more tragic. The pain that Europe, especially its poor and young, is suffering as a result of its leaders willful ignorance of the lessons of the past is entirely unnecessary.
Why a More Flexible Renminbi Still Matters
by Kenneth Rogoff of Project Syndicate,
Given the sharp drop in Chinas current-account surplus, should the US, the IMF, and other players stop pressing China to move to a more flexible currency regime? The answer is no, because Chinas economy is still plagued by massive imbalances, and a more flexible regime would provide an important stabilizer.
Germanys Neighborhood Watch
Ultimately, there can be no strong Germany without a stable eurozone; no stable eurozone without a strong Germany; and no global economic stability without both. Germans might not like their choices, but refusing the responsibility of leadership is one option that Germany does not have.
The Economy and the Presidency
If history is a reliable guide, the outcome of the US presidential election will depend significantly on the economys performance between now and November 6, and on Americans perception of their economic future under the two candidates. While other issues may well influence voters, economic conditions favor Mitt Romney.
America's Renminbi Fixation
For seven years, the US has allowed its fixation on the renminbis exchange rate to deflect attention from far more important issues in its economic relationship with China. The upcoming Strategic and Economic Dialogue between the US and China is an excellent opportunity to examine and rethink Americas priorities.
Europes Short Vacation
by Nouriel Roubini of Project Syndicate,
The honeymoon for the ECB's new president Mario Draghi has turned out to be brief. The trouble is that the eurozone has an austerity strategy, but no growth strategy and, without that, all it really has is a recession strategy that makes austerity self-defeating, because, if output continues to contract, deficit and debt ratios will continue to rise to unsustainable levels.
Reversing Europes Renationalization
by George Soros of Project Syndicate,
At the onset of the euro crisis, a eurozone breakup was inconceivable: assets and liabilities were so intermingled that a breakup would have led to an uncontrollable meltdown. But, as the crisis has progressed, the eurozone financial system has been progressively reoriented along national lines.
A Centerless Euro Cannot Hold
by Kenneth Rogoff of Project Syndicate,
Europe may never be an optimum currency area by any standard. But, without further profound political and economic integration which may end up excluding some current eurozone members the euro may not make it even to the end of this decade.
The Hazard of Second Best
The international community appears increasingly intent on settling for second best on two key issues to be discussed this month in global meetings in Washington, DC: the lingering (if currently dormant) European debt crisis, and the selection of the World Banks next president. It is not too late to change course.
Chinas Stability Gambit
Given centuries of turmoil in China, todays leaders will do everything in their power to preserve political, social, and economic stability. That is why they removed Bo Xilai, the powerful Party Secretary of Chongqing, just before a major conference that attacked the economic model that he personified.
Scary Oil
by Nouriel Roubini of Project Syndicate,
Todays fragile global economy faces many risks: the risk of another flare-up of the eurozone crisis; the risk of a worse-than-expected slowdown in China; and the risk that the US economy's recovery fizzles (again). But no risk is more serious than that posed by a further spike in oil prices.
Jeremy Lin and the Political Economy of Superstars
by Kenneth Rogoff of Project Syndicate,
High salaries for athletes and movie stars are easily accepted by the public. So why, if a financial trader or a corporate boss is paid a fortune, does the public suspect that he or she must be undeserving or, worse, a thief.
Asias Take on Austerity
With Europe on the brink of recession and recovery in the US finally getting some traction, the case for fiscal consolidation appears increasingly weak. But the case becomes stronger when one considers Asian countries' path from crisis in the late 1990's to astounding growth and prosperity today.
Too Big to Jail
by Simon Johnson of Project Syndicate,
Among the fundamental principles of any functioning judicial system is the following: Dont lie to a judge or falsify documents submitted to a court, or you will go to jail. These are serious criminal offenses, but apparently not if you are the heart of Americas financial system.
The Upticks Downside
by Nouriel Roubini of Project Syndicate,
Since late last year, a series of positive developments has boosted investor confidence and led to a sharp rally in risky assets, starting with global equities and commodities. But at least four downside risks are likely to materialize this year, undermining global growth and negatively affecting investor confidence and market valuations of risky assets.
Europes Tobin Tax Distraction
European leaders have revealed their top-secret plan for solving the euros crisis: a version of the Tobin tax, a levy on financial transactions first suggested in 1972. The only problem is that the tax was intended to solve an entirely different problem from those that afflict Europe today.
Capturing the ECB
There are several explanations for the ECBs insistence on a "voluntary" restructuring of Greece's sovereign debt, none of which speaks well for the institution. Indeed, as we have seen elsewhere, institutions that are not democratically accountable tend to be captured by special interests.
Coronary Capitalism
by Kenneth Rogoff of Project Syndicate,
Just as the financial industry caused a near-meltdown of the global economy in 2008, the food industry has facilitated the explosion of obesity around the world. In both cases, the links to broader problems with contemporary Western capitalism have become impossible to ignore.
A Crisis in Two Narratives
by Raghuram Rajan of Project Syndicate,
With the worlds industrial democracies in crisis, two competing narratives of its sources and appropriate remedies are emerging. For better or worse, the narrative that persuades these countries governments and publics will determine their future and that of the global economy.
New Year, Same Crisis
by George Soros of Project Syndicate,
The measures introduced by the European Central Bank last December have relieved the liquidity problems of European banks, but have not cured the financing disadvantage of the highly indebted member states. Since high-risk premiums on government bonds endanger the capital adequacy of banks, half a solution is not enough.
The Libertarian and the Lobbyists
by Simon Johnson of Project Syndicate,
Among the Republican candidates still vying to challenge Barack Obama in Novembers US presidential election, Ron Paul stands out for arguing consistently that government is the problem, not the answer, with regard to banking. But the real problem with financial regulation, a new study shows, is lobbying.
Egypts Unfinished Revolution Will Succeed
A year ago, as the World Economic Forum convened in Davos, Egyptians of all ages and religions took to the streets and, in just 18 days of relatively peaceful protests, removed a regime that had ruled over them with an iron fist for 30 years. Today, their revolution is, unfortunately, incomplete and imperfect, but make no mistake: Egyptians will finish what they started.
Repairing the Global Plumbing
More than three years after the global financial crisis, the world still has a nasty plumbing problem: credit pipes remain clogged, and only central banks are working to clear them. Fortunately, it is not too late to build broader pipes that compliment and replace the damaged infrastructure.
Does Austerity Promote Economic Growth?
by Robert Shiller of Project Syndicate,
Policymakers cannot afford to wait decades for economists to figure out definitively how government austerity affects growth. But, judging by the evidence that we have, austerity programs in Europe and elsewhere appear likely to yield disappointing results.
The Perils of 2012
The pragmatic commitment to growth that one sees in Asia and other emerging markets today stands in contrast to the Wests misguided policies, which, driven by ideology and vested interests, almost seem to reflect a commitment not to grow. As a result, global economic rebalancing is likely to accelerate, almost inevitably giving rise to political tensions.
Europes Vicious Spirals
While 2011 was supposed to be the year when European leaders finally got a grip on events, the eurozones problems went from bad to worse. The problem is not just that Europe faces a sovereign-debt crisis, but also that it faces a growth crisis, which worsens the debt problem.
Rethinking the Growth Imperative
by Kenneth Rogoff of Project Syndicate,
Modern macroeconomics often seems to treat rapid and stable economic growth as the be-all and end-all of policy. But, while that is the message from graduate classrooms to central-bank boardrooms to newspapers front pages, is it true?
The New International Economic Disorder
A new economic order is taking shape in front of our eyes, as the old Western powers and the emerging worlds major new players converge. But the forces driving this convergence are not those that generations of economists envisaged when they pointed out the inadequacy of the old order.
Austerity and the Modern Banker
by Simon Johnson of Project Syndicate,
Santa Claus came early this year for four former executives of Washington Mutual (WaMu), a large US bank that failed in fall 2008. The Federal Deposit Insurance Corporation (FDIC) had brought a lawsuit against the four, actions that included taking huge financial risks while knowing that the real estate market was in a bubble. The FDIC sought to recover $900 million, but the executives have just settled for $64 million, almost all of which will be paid by their insurers; their out-of-pockets costs are estimated at just $400,000.
Fragile and Unbalanced in 2012
by Nouriel Roubini of Project Syndicate,
The outlook for the global economy in 2012 is clear, but it isnt pretty: recession in Europe, anemic growth at best in the US, and a sharp slowdown in China and in most emerging-market economies. Restoring robust growth is difficult enough without the ever-present specter of deleveraging and a severe shortage of policy ammunition.
Results 951–1,000
of 1,033 found.
