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A website forum in which senior fellows of the Peterson Institute for International Economics discuss and debate their responses to global economic and financial developments as they occur each day and offer insights that others might overlook.
Europeans may find several historical and theoretical reasons why a political government for the euro area would be desirable. But after the global crisis there are technical reasons why it is more than desirable. That conclusion is a necessity in light of three increasingly important aspects of current monetary developments in [...]
Most discussions about financial stability tend to focus on steps to ensure that last year’s meltdown does not happen again, including tighter regulation of capital and compensation policies, prevention of moral hazard through new resolution mechanisms, overhaul of supervisory structures, and reform of governance and disclosures.
But Europe’s policymakers should [...]
The agreement to coordinate global economic strategies was one of the most impressive achievements by the G-20 in Pittsburgh and at the IMF meeting in Istanbul. But without credible agreements on currency policies, that project could turn out to be very vulnerable, or even a Trojan horse allowing politically stronger [...]
The headline news from the G-20 summit in Pittsburgh is that progress has been made on “IMF reform,” meaning increased voting power for emerging markets relative to rich countries—remember that Western Europeans are greatly overrepresented at the IMF for historical reasons. But further change in a sensible direction is [...]
A common American assumption has been that the US economy would recover earlier and faster than that of the European Union. Therefore, the preliminary results for the second quarter of 2009, which showed that Germany and France grew by 0.3 percent over the first quarter of 2009, delivered a surprise. Well, this should not have [...]
German Chancellor Angela Merkel will meet with President Obama today, June 26, in Washington to deepen US-German cooperation on economic, security, and climate-change issues. An unfortunate quote of mine to a German paper from some months back has been trotted out in the press to exemplify informed American skepticism on the German governing coalition’s economic [...]
In January, we calculated the likely impact of the global economic crisis by comparing the International Monetary Fund’s (IMF) growth forecast for the crisis years with the average growth in the precrisis period of 2005–07. Given the release of new growth forecasts, we update our exercise here, but focus on the forecast for 2009. Three [...]
Whenever reform of health care is discussed in America, the argument that “America rejects socialized medicine” is heard in many quarters.
Superficially, the facts suggest that the private sector has always accounted for the majority of healthcare expenditure in the United States (approximately 55 percent of total expenditures since the early [...]
It is common knowledge that the cost of Medicare and Medicaid will grow to become an unsustainably large part of the US federal budget in coming decades. Perhaps less well known is that more than 80 percent of the projected increases derive from “excess cost growth,” unrelated to expansion in coverage or the effects of [...]
In every major crisis you have a choice. You cannot choose between inaction and action, because ultimately you will be forced to act. You do not really choose between bailout and no bailout, because very soon you find that all the reasonable options involve some sort of bailout for some people (and not for others). [...]