Economics

Article

America’s Fatal Flaw in its Competition With China Is Thinking Militarily, Not Economically

Author: Jennifer M. Harris
The WorldPost

Last week, Washington attempted two important policy feats aimed squarely in Beijing’s direction. U.S. Defense Secretary Ash Carter grabbed headlines by visitingthe South China Sea, after earlier announcing he would scrap a visit to Beijing amid rising tension over territorial disputes in the region.

See more in United States; China; Economics; Military Operations

Event

Media Call: Debating Policy on China and the U.S. Economy

Presider: Gideon Rose
Speaker: Jacob S. Hacker
Speaker: Stephen G. Brooks

Republican presidential candidates are calling for Washington to get tougher on an assertive China and reduce the size of the U.S. government. In a media call, contributors to the upcoming May/June issue of Foreign Affairs make the opposite case, calling for patience with China and a significant public role in boosting the domestic economy.

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Other Report

Global Economics Monthly April 2016

Author: Robert Kahn

Steven A. Tananbaum Senior Fellow for International Economics Robert Kahn argues that the case for strong and effective Group of Twenty (G20) leadership is as compelling as ever. But if the G20 is to be as effective in noncrisis times as it was in 2008–2009, it needs stronger Chinese leadership, working informally yet closely with the United States—a Group of Two (G2) within the G20. Debt policy is one area where China and the United States should cooperate this year.

See more in Global; Economics

News Release

State Capitalism Threatens Global Security and Prosperity, Argues Kurlantzick in New Book

Over the past two decades, many developing countries have turned away from free market capitalism and toward modern state capitalism, which is a combination of traditional state economic planning and elements of free market competition. In his new book, Council on Foreign Relations Senior Fellow for Southeast Asia Joshua Kurlantzick argues that modern state capitalism is ultimately “more protectionist, more dangerous to global security and prosperity, and more threatening to political freedom” than free market economics.

See more in Asia and Pacific; Russian Federation; Economics

Op-Ed

Why Is Paul Krugman Still Calling for Fiscal Stimulus?

Author: Benn Steil
Weekly Standard

Benn Steil’s latest op-ed in The Weekly Standard examines Paul Krugman’s continuing calls for fiscal stimulus, as well as his defense of government wage intervention and mercantilism.  These have all been grounded in the assertion that the United States is in a “liquidity trap,” in which monetary policy is ineffective.  Steil explains why the theory of liquidity traps is logically inapplicable when the central bank’s policy rate is positive, as it has been in the United States since December, and concludes that it operates as a fig leaf behind which to advocate policies with less scientific rationales.

See more in United States; Monetary Policy

Interactive

Global Monetary Policy Tracker

Authors: Benn Steil and Emma Smith

CFR’s Global Monetary Policy Tracker compiles data from 54 countries around the world to highlight significant global trends in monetary policy. Who is tightening policy? Who is loosening policy? And what is the policy stance of the world as a whole? Learn more!

See more in Global; Economics

Testimony

Objectives and Future Direction for Rebalance Economic Policies

Author: Elizabeth C. Economy

In testimony before the U.S.-China Economic and Security Review Commission, Elizabeth Economy discussed the economic components of the “rebalance to Asia” and its prospects going forward. She recommended that the U.S. Congress ratify TPP, continue to support the Ex-Im Bank, and increase support for NGO operations across the Asia-Pacific in fields such as legal education and anti-corruption that help promote good economic governance. She also called for greater coordination between commercial diplomacy and strategic economic plans and greater support for the proposed U.S. New Silk Road initiative.

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Op-Ed

The Trump-Sanders China Syndrome

Authors: Benn Steil and Emma Smith
Wall Street Journal

Benn Steil’s op-ed in the March 30 edition of the Wall Street Journal, co-authored with Emma Smith, looks at presidential campaign charges that China is engaged in “currency manipulation” to boost net exports.  They show that the aims of China’s pegged exchange rate regime have varied over the past two decades, and have not always been mercantilist. In recent months, with capital flowing out of China at a prodigious rate, its interventions have been to keep its currency up—not down.  Launching a trade war with China over currency management, as Donald Trump and Bernie Sanders intend, would therefore be nonsensical—as well as damaging to U.S. interests.

See more in China; United States; Monetary Policy; Elections