This may be excessively optimistic on my part, but there seems to be a slow change in the way the world thinks about reserve currencies. For a long time it was widely accepted that reserve currency status granted the provider of the currency substantial economic benefits. For much of my career I pretty much accepted […]
Read More…How much longer can the global trading system last?
My last blog entry inspired an old Brazilian friend of mine, with whom I hadn’t had any contact for years, to comment on this section of the interview: It seems to me that the US is becoming increasingly isolationist, largely because it is increasingly uncertain that the benefits to the US of a US-dominated world […]
Read More…“…not with a bang but a whimper”
Doug, Pancoast, an American entrepreneur living in Shanghai, asked to interview me for his blog, and I agreed to do so. I think it was meant to be a brief interview, but I began to respond on a Saturday evening, while waiting for the performance at my club to begin (my office is at my […]
Read More…What does a “good” Chinese adjustment look like?
I have always thought that the soft landing/hard landing debate wholly misses the point when it comes to China’s economic prospects. It confuses the kinds of market-based adjustments we are likely to see in the US or Europe with the much more controlled process we see in China. Instead of a hard landing or a […]
Read More…Can Pedro Sanchez save the PSOE?
Last month Pedro Sánchez Castejón was chosen to be the new leader of Spain’s center-left Socialist Party (PSOE). El Pais called his appointment a “renewal” of the PSOE, although Sánchez seems to have been chosen mainly because he is too young and unknown to suffer from the revulsion most Spaniards feel towards the political establishment. […]
Read More…Bad debt cannot simply be “socialized”
Once again I am going to discuss debt, and my discussion will be mainly conceptual. I suspect that many of my regular readers might wonder why I keep returning to this subject – and, often enough, keep saying the same things. The reason is because while debt plays a key role in understanding the recent […]
Read More…The four stages of Chinese growth
From the early 1980s until now China has grown at a pace not matched since the four decades Argentina enjoyed before the First World War. In spite of some fairly goofy attempts a few years ago, however, to characterize China during this period as having followed a set of policies called the “Beijing Consensus”, these […]
Read More…Some things to consider if Spain leaves the euro
It might seem almost churlish to wonder what would happen if Spain were to leave the euro. The official European position is that the battle of the euro has been pretty much won, and anyone who argues otherwise will be accused of being a euro hater, an Anglo-Saxon or, even worse, a writer for the […]
Read More…Why a savings glut does not increase savings
Debate about the global savings glut hypothesis is mired in confusion, a fundamental one of which is the seemingly obvious but false claim that a global savings glut must lead to higher global savings. Here, for example, is a recent piece by one of my favorite economists, Barry Eichengreen: There is only one problem: the […]
Read More…Do we understand the math behind the PPP calculations?
A new PPP study complied by the World Bank has generated some pretty excited and, to some, alarming headlines about the new world order. There has been limited reference to this in the Chinese press, for reasons I will discuss later, but here is the Financial Times on the subject: The US is on the […]
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