Economics

Foreign Affairs Article

Taper Trouble

Author: Benn Steil

Benn Steil's essay in the July/August issue of Foreign Affairs looks at the international consequences of U.S. monetary policy action. He argues that developing-nation governments are coming to see the need for engineering current-account surpluses and large dollar-reserve stockpiles as a means of insulating themselves against Fed-induced capital-flow whiplash. As this amounts to "currency manipulation" in the eyes of U.S. policymakers, trade tensions are apt to grow.

See more in Ukraine; United States; Monetary Policy; International Finance

Foreign Affairs Article

New World Order

Authors: Erik Brynjolfsson, Andrew McAfee, and Michael Spence

Recent advances in technology have created an increasingly unified global marketplace for labor and capital. The ability of both to flow to their highest-value uses, regardless of their location, is equalizing their prices across the globe.

See more in United States; Labor

Foreign Affairs Article

Voodoo Abenomics

Author: Richard Katz

Imagine the predicament currently facing a growing number of Japanese men in their early 30s. Despite having spent years cramming in high school and attending good colleges, many can't find a full-time job at a good company.

See more in Japan; Competitiveness

Foreign Affairs Article

Indonesia in Pieces

Author: Elizabeth Pisani

In April, voters in Indonesia's parliamentary elections shocked many observers, confounded most pollsters, and seemed to set back their own long-term interests by failing to deliver a massive victory to the main opposition party, the Indonesian Democratic Party of Struggle.

See more in Indonesia; Financial Crises

Foreign Affairs Article

Reforming Nigeria

Author: Ngozi Okonjo-Iweala

Born to professors in what was then still a British colony, Ngozi Okonjo-Iweala was a teenager when civil war broke out in Nigeria seven years after independence, and she ended up working as a cook for the Biafran rebels on the frontlines.

See more in Nigeria; International Finance

Foreign Affairs Article

Putin's Lehman Moment

Author: Robert Kahn

Robert Kahn argues that the West should be ready to impose more robust economic sanctions against Russia, in order to deter it from further infiltrating or destabilizing Ukraine. Russia's economic complexity means sanctions would meaningfully reduce Russian wealth and growth, since Russian oligarchs and business leaders have significant financial stakes in the West.

See more in Russia and Central Asia; Sanctions

Foreign Affairs Article

NAFTA's Unfinished Business

Author: Michael Wilson

In 1992, when Canadian Prime Minister Brian Mulroney sat down with Mexican President Carlos Salinas and U.S. President George H. W. Bush to sign the North American Free Trade Agreement, free trade was still a matter of fierce national debate in Canadian politics.

See more in Canada; Trade

Foreign Affairs Article

Iceland's Saga

Author: Ólafur Ragnar Grímsson

By all rights, Iceland -- a remote Arctic island inhabited by just 320,000 people -- should be a forgotten backwater. And for most of its history, it was.

See more in Iceland; Economics

Foreign Affairs Article

Blind Oracle

Author: Richard Katz

In his recent essay "Never Saw It Coming" (November/December 2013), Alan Greenspan makes two central arguments: first, that virtually no one foresaw the 2008 U.S. financial crisis and, second, that irrational "animal spirits" were the root cause.

See more in United States; Financial Crises

Foreign Affairs Article

Never Saw It Coming

Author: Alan Greenspan

The former chair of the U.S. Federal Reserve asks how so many experts, including him, failed to see the 2008 financial crisis approaching. An important part of the answer to that question is a very old idea: Keynesian "animal spirits," the irrational elements of decisionmaking that have been left out of economic forecasting for too long.

See more in United States; Financial Crises

Foreign Affairs Article

Bridge to Somewhere

Author: Jose W. Fernandez

International development has moved beyond charity. Gone are the days when the United States would just spend its seemingly bottomless largess to help less fortunate or vanquished countries, as it did after World War II.

See more in United States; Infrastructure

Foreign Affairs Article

Mutual Assured Production

Author: Richard Katz

Tensions between China and Japan are rising, but an economic version of mutual deterrence is preserving the uneasy status quo. Put simply, China needs to buy Japanese products as much as Japan needs to sell them.

See more in China; Japan; Trade