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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.
The latest economic data from France look bad. The strategy of keeping official growth forecasts high (despite the evidence) is coming under increasing pressure and there may be substantial revisions to the outlook in the pipeline. Once you break through to being more honest, there is some catching up [...]
We know there is going to be a large fiscal surge in the United States (the latest estimate is a stimulus of $675 billion to $775 billion, which is a bit lower than numbers previously floated). This will likely arrive as the US recession deepens and fears of deflation take [...]
According to the Rodong Sinmun, official organ of the Korean Workers Party, “The ‘Dollar Empire’ has crashed into the cellar, and the financial sector, economics sector, and of course the political sector, are all gasping for breath as they beg for foreign assistance.” The reason: astronomical expenditures on cruel, barbarous, blood-stained campaigns of mass murder to plunder Middle Eastern oil driven by Americas “limitless greed and aspiration to dominate the world” for which it will face an inevitable sentence of death.
The usual grounds for optimism these days is the fact that the Obama administration is clearly going to propose a big fiscal package with two components: a large conventional stimulus (spending plus tax cuts), and a big housing refinance scheme, in which the Treasury will potentially become the largest-ever [...]
The dollar is depreciating in eye-catching and headline-grabbing fashion. The Japanese authorities are signaling that they are prepared to intervene. The G-7 (remember them?) has the established role of coordinated intervention in major currency markets when things get out of hand. So where are they now and when will they come in?
Congressman Xavier Becerra (D-CA) reportedly declined President-elect Obama’s offer to be the new US Trade Representative because he “came to the conclusion that [trade] wouldn’t be priority number one, and it might not be number two or three.” Given the enormous problems facing the American economy, and given American attitudes toward trade ranging from ambivalence [...]
It should come as no surprise that Ecuador has become the first Latin American country—and the second country after the Seychelles—to default on its debt since the start of the current financial crisis. In market terms the default, which occurred on December 12, is not a big deal. Ecuador’s debt totals no more than $3.9 [...]
The current consensus view (e.g., as seen in the World Bank’s Global Economic Prospects) is that we are having a serious downturn, with annualized growth for the fourth quarter in the United States at minus 4 percent or worse. But the consensus is that a recovery will be underway by mid-2009 in the United States [...]
One of the many urgent matters confronting the Obama administration is an action agenda for the G-20 economic summit meeting in April to be hosted by Prime Minister Gordon Brown.1 At their first summit in November, the G-20 leaders declared that their next meeting should focus primarily on an overhaul of global financial markets and [...]
The IMF is signalling that it will further revise down its global growth forecast. This is after cutting the forecast sharply in October and again in November. Their latest published view is growth in 2009 will be 2.2 percent year-on-year, and 2.4 percent fourth quarter on fourth quarter. This view is dated [...]