"In a monetary union, adjustment is hard without any transfers and without a fiscal union. I know of no plausible plan how the eurozone can manage the dual feat of economic adjustment and debt sustainability within the straitjacket of official policy. And as long as such a plan does not exist, the crisis is not over."
"The International Monetary Fund proceeded with its record 2010 bailout of Greece despite deep internal divisions over whether it would work, according to confidential documents that contradict the fund's public statements."
"So far, the grand bargain between the core and the periphery has held up: the periphery continues austerity and reform while the core remains patient and provides financing. But the eurozone's political strains may soon reach a breaking point, with populist anti-austerity parties in the periphery and populist anti-euro and anti-bailout parties in the core possibly gaining the upper hand in next year's European Parliament elections."
Authors: Christopher Alessi and Mohammed Aly Sergie
The Fed, which celebrated its centennial in 2013, has been transformed in the past decade, expanding its role of maintaining full employment and stable prices to deploying trillions of dollars to boost the U.S. economy.
As Egypt's political crisis deepens, its economy has been stabilized by a cash infusion from the oil-rich Persian Gulf. Economist Farouk Soussa outlines the limited options facing Egypt's interim government.
The global economic downturn is hardly over, and without a more dramatic set of actions, the United States is likely to suffer another major crisis in the years ahead. A new book by Alan Blinder may be the best general volume on the recession to date, but it paints an overly optimistic portrait of the current situation.
Central bankers have always carried a mystique far beyond justification, whether they are cast as malicious, incomprehensible, or all-powerful. Neil Irwin's new book on monetary policy during the financial crisis should dispel these myths once and for all.
Benn Steil's op-ed for Paul Solman's PBS The Business Desk site looks critically at calls for "a new Bretton Woods." He argues that many of the critical precepts behind the 1944 American Bretton Woods blueprint were overturned by the Truman Administration a mere three years later, and that the operation of the Bretton Woods monetary system was far briefer and more troubled than is typically reckoned.
The prospective challenge of containing inflation, buttressing a collapsed housing market, and normalizing the Federal Reserve's bloated balance sheet has created an "exit strategy" dilemma for Chairman Ben Bernanke. CFR Director of International Economics Benn Steil urges the Federal Reserve to swap mortgage-backed securities with the U.S. Treasury in exchange for Treasury securities, which the Fed can then sell as part of a normal process of monetary tightening.
The Council on Foreign Relations' David Rockefeller Studies Program—CFR's "think tank"—is home to more than seventy full-time, adjunct, and visiting scholars and practitioners (called "fellows"). Their expertise covers the world's major regions as well as the critical issues shaping today's global agenda. Download the printable CFR Experts Guide.
The authors argue that it is essential to begin working now to expand and establish rules and norms governing armed drones, thereby creating standards of behavior that other countries will be more likely to follow.
The author examines Pakistan's complex role in U.S. foreign policy and advocates for a two-pronged approach that works to quarantine threats while integrating Pakistan into the broader U.S. agenda in Asia.