Governance

"Despite its economic slowdown, Japan retains impressive power resources. It is a democracy that has been at peace for 70 years, with a stable society and a high standard of living. Its per capita income is five times that of China, and Beijing residents can only envy Tokyo's air quality and product safety standards. Its economy remains the world's third largest overall, sustained by highly sophisticated industry."

"Despite its past achievements, the EU now suffers from growing tensions and several self-inflicted wounds. The EU is likely to experience repeated crises and internal divisions, and one cannot rule out a gradual and irreversible decline in its cohesion and influence. Because a prosperous and tranquil Europe is in America's interest, this is not good news for the United States."

"China holds dollars that it receives from its exports to America, while the US, by keeping its market open to Chinese products, helps to generate growth, employment, and stability in China. Yes, China could bring the US economy to its knees by dumping its dollars, but not without taking a serious hit itself."

"In our view, the field has moved away from a careful reliance on theory, and is just mindlessly going out and testing hypotheses without thinking very hard about what's really causing what."

"Banking regulation may not be the most voter-friendly topic. Yet the reality is that the best way to create employment in the periphery is by ending the fragmentation of the financial system that continues to plague Europe. As long as Greek, Portuguese, Spanish or Italian entrepreneurs need to pay a premium of between 4 and 6 percent above what their German counterparts pay on bank loans, how can they possibly start new businesses?"

"To argue that 'Mr Monti promised reform and ended up raising taxes' is to grossly misunderstand an imperfect but positive labour reform, pension changes and progress on competitiveness, tax evasion and corruption."

European Central Bank (ECB) President Mario Draghi's Outright Monetary Transactions (OMT) gives the populists' opponents a new weapon: support while structural reform takes hold. As he implied on Thursday, purchases are rewards for the countries implementing good reforms. Conversely, the ECB can stop OMT if it judges national policies to be "deserving" of punitive rates. Draghi should not hesitate to use this power to preserve credibility: while monetary policy operates within democracy, it is not itself be democratic.

"Having a professional military means that the United States can go to war while the vast majority of citizens are not directly affected. Therefore it falls upon the president, more than any other individual, to make sure the nation goes to war only if and when absolutely necessary."

"With all its imperfections, Europe today is the largest single market in the world, featuring effective anti-trust regulations, curtailing economic nationalism, and promoting free trade agreements with counties as far away as Asia and Latin America. New potential members are eager to join, from booming Turkey to crisis-ridden Iceland. Despite all the talk of stalling, Turkish membership will eventually come to pass."