9 Items

Blog Post - Views on the Economy and the World

You Don’t Miss International Cooperation Until It's Gone

| Dec. 02, 2020

As Joni Mitchell sang, “you don’t know what you’ve got ‘til it’s gone.”   Classroom education was often deemed boring by students and obsolete by tech visionaries.  Then the coronavirus made it difficult or impossible to meet in person.  The result:  We yearn for the irreplaceable in-class experience.
Perhaps the same is true of international economic cooperation. It was never especially popular. The theory, first formulated in a 1969 paper by Richard Cooper, said that countries could agree to coordinated bargains that achieved better outcomes, relative to the “Nash non-cooperative equilibrium.”  But economists thought of plenty of reasons to be skeptical.  The multilateral institutions of cooperation such as the World Trade Organization, the International Monetary Fund, and the United Nations agencies, were downright unpopular among the public.  Many Americans regarded them as invading US sovereignty, while other countries viewed them as an invasion of their sovereignty by the US.

Blog Post - Views on the Economy and the World

Fiscal Education for the G-7

| May 26, 2016
As the G-7 Leaders gather in Ise-Shima, Japan, on May 26-27, the still fragile global economy is on their minds.  They would like a road map to address stagnant growth. Their approach should be to talk less about currency wars and more about fiscal policy.Fiscal policy vs. monetary policyUnder the conditions that have prevailed in most major countries over the last ten years, we have reason to think that fiscal policy is a more powerful tool for affecting the level of economic activity, as compared to monetary policy.

Blog Post - Views on the Economy and the World

A Pre-Lima Scorecard for Evaluating Who is Doing their Fair Share in Pledged Carbon Cuts

| Nov. 19, 2014
Those worried about the future of the earth’s climate are hoping that this year’s climate change convention in Lima, Peru, December 2014, will yield progress toward specific national commitments, looking ahead to an international agreement at the make-or-break Paris meeting to take place in December 2015.The precedent of the Kyoto Protocol negotiated in 1997 is more discouraging than encouraging. It was an encouraging precedent in that countries were politically able to agree on legally binding quantitative limits to their emissions of Greenhouse Gases, to be achieved with the aid of international trading and other market mechanisms.

Blog Post - Views on the Economy and the World

Cuba: A Trip Back to 1959

| Nov. 25, 2012
I recently visited Cuba for the first time, to participate in scholarly meetings.  For an American citizen this short voyage requires a leap through hyperspace.   It was my third attempt over ten years to get there.  Obstacles had included both the US government and the Cuban government.This was a trip back in time, to 1959.   For one thing, a majority of the (few) autos on the street in Havana are large American cars from the 1950s.  Most are beautiful.   One hears about the cars, but I had thought the reports must be exaggerated.

Blog Post - Views on the Economy and the World

Will Emerging Markets Fall In 2012

| Jan. 23, 2012
Emerging markets have performed amazingly well over the last seven years. They have outperformed the advanced industrialized countries in terms of economic growth, debt-to-GDP ratios, and countercyclical fiscal policy.  Many now receive better assessments by rating agencies and financial markets than some of the advanced economies.As 2012 begins, however, emerging markets may be due for a correction, triggered by a new wave of “risk off” behavior among investors. Will China experience a hard landing? Will a decline in commodity prices hit Latin America? Will the sovereign-debt woes of the European periphery spread to neighbors such as Turkey in a new “Aegean crisis”?Engorged by large capital inflows, some emerging market countries were in an overheated state a year ago.

Blog Post - Views on the Economy and the World

Escaping The Oil Curse

| Dec. 15, 2011
Libyans have a new lease on life, a feeling that, at long last, they are the masters of their own fate. Perhaps Iraqis, after a decade of warfare, feel the same way. Both countries are oil producers, and there is widespread expectation among their citizens that that wealth will be a big advantage in rebuilding their societies.Meanwhile, in Africa, Ghana has begun pumping oil for the first time, and Uganda is about to do so as well. Indeed, from West Africa to Mongolia, countries are experiencing windfalls from new sources of oil and mineral wealth.

Blog Post - Views on the Economy and the World

Escaping the Oil Curse

| Dec. 15, 2011
Libyans have a new lease on life, a feeling that, at long last, they are the masters of their own fate. Perhaps Iraqis, after a decade of warfare, feel the same way. Both countries are oil producers, and there is widespread expectation among their citizens that that wealth will be a big advantage in rebuilding their societies.Meanwhile, in Africa, Ghana has begun pumping oil for the first time, and Uganda is about to do so as well. Indeed, from West Africa to Mongolia, countries are experiencing windfalls from new sources of oil and mineral wealth.

Blog Post - Views on the Economy and the World

The US & Europe Could Look South to Re-learn Countercyclical Fiscal Policy

| Oct. 28, 2010
During much of the last decade, U.S. fiscal policy has been procyclical, that is, destabilizing.   We wasted the opportunity of the 2003-07 expansion by running large budget deficits.   As a result, in 2010, Washington now feels constrained by inherited debts to withdraw fiscal stimulus at a time when unemployment is still high.   Fiscal policy in the UK and other European countries has been even more destabilizing over the last decade.  Governments decide to expand when the economy is strong and then contract when it is weak, thereby exacerbating the business cycle.