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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.
Pessimists believe that Ukraine is on the verge of default. Fortunately, such a calamity is unlikely, but Ukraine badly needs more international financial support to handle a tremendous external shock.
A year ago, Ukraine’s economy was in sound health after eight years of an average annual economic growth of [...]
Having lived through the Swedish banking crisis in the 1990s, I am struck by how poorly the American public understands what really was a successful cure that remains relevant to the current situation. In fact, the Swedish example would probably provide the best, most capitalist, solution for the United States.
All indications are that the Obama [...]
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). [...]
International Monetary Fund (IMF) managing director Dominique Strauss-Kahn has called for those countries with fiscal room to maneuver to enact fiscal stimulus packages of 2 percentage points of their respective national gross domestic products (GDP). This is a modest and poorly defined objective. The world needs more ambition and precision.
A more ambitious objective would be [...]
The US Treasury reportedly will begin strict examinations of the 20 biggest American banks’ balance sheets starting this week. If anything close to current asset values are used to evaluate those books, and they should be, many of these banks will need public capital injections or closure. The reluctance to pull [...]
At the end of the third week of February, Senators Dodd and Schumer signaled that financial elite solidarity had broken; “nationalization” is no longer taboo. The consensus is dead (check with Barney Frank), crazy ideas abound, and long live what new policy approach? Here are five sets of issues to guide [...]
Yesterday, Secretary of State Hillary Clinton told a Chinese television audience that they and their government are "making a very smart decision by continuing to invest in Treasury bonds." Legitimate point. It is true, President Obama’ s package to rescue the economy, including the stimulus plan and one hopes [...]
The prevailing consensus on any economic policy is a fascinating beast. For years it can stay put, seemingly immovable, and even in some cases become enshrined in legislation or central bank statutes. One day it begins to shake ever so slightly; under the pressure of events a wider range [...]
The latest problems in filling the Obama cabinet illustrate the peculiar difficulty that US governments have during the transition period following the election of a new president. In 2009, however, the same volatile transition blend of “fin de regime” and uncertainty about the future will—possibly with a vengeance—grip the governmental machinery [...]
At the G-20 Summit, held in November 2008, leaders pledged to avoid protectionist policies. Before the ink was dry, India and Russia put up new barriers. Since the turn of the year, Britain has engaged in financial protectionism, France has proposed restrictive auto measures, and the United States has enacted [...]