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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 [...]
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). [...]
In a new onslaught of bad economic news in Europe, spreads among sovereign eurozone bond yields have risen sharply in recent months, accompanied by accelerating credit downgrades of the currency union’s weaker members (initially Ireland, Greece, Portugal, Spain, and perhaps Italy). But there is a beneficial aspect to these adverse developments in that they represent [...]
It looks like a bank aggregator for bad assets is pretty much a done deal. David Axelrod said Sunday that we should expect a new approach within a few days, and leading reporters (New York Times, Washington Post) have discerned that this is likely to include a “bad bank” into [...]
I’ve had a chance over the past 10 days to debate the details of what’s next for the macroeconomy with leading policymakers in both the eurozone/European Union and India. I’m struck by some similarities. In both places, there is little or no concern that inflation will rebound any time soon. As a result, people based [...]
One leading antirecession idea for the moment is a global fiscal stimulus amounting to 2 percent of the planet’s GDP. The world’s leading economies are still making their calculations, but their efforts obviously assume a big stimulus in the United States and a pretty big fiscal expansion in [...]