"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."
The role of the Federal Reserve has transformed in the past decade, as it has deployed trillions of dollars to boost the U.S. economy while expanding its regulatory oversight of the nation’s financial system.
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.
Authors: Benn Steil and Dinah Walker Financial News
Benn Steil and Dinah Walker explain the market massacre following Ben Bernanke's press conference on June 19. Bernanke's repeated statements that a key tool of current Fed policy, asset purchases, would be "calibrated" to employment data, each month's publication of which can imply a major shift in the unemployment trend line, suggests that Fed tightening could begin as early as the middle of next year—nearly a year and half earlier than the Fed had suggested in its pledge statement last fall.
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.
"Austerity has failed. It turned a nascent recovery into stagnation. That imposes huge and unnecessary costs, not just in the short run, but also in the long term: the costs of investments unmade, of businesses not started, of skills atrophied, and of hopes destroyed."
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 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 the United States has responded inadequately to the rise of Chinese power and recommend placing less strategic emphasis on the goal of integrating China into the international system and more on balancing China's rise.
Campbell evaluates the implications of the Boko Haram insurgency and recommends that the United States support Nigerian efforts to address the drivers of Boko Haram, such as poverty and corruption, and to foster stronger ties with Nigerian civil society.
Learn more about CFR’s mission and its work over the past year in the 2014 Annual Report. The Annual Report spotlights new initiatives, high-profile events, and authoritative scholarship from CFR experts, and includes a message from CFR President Richard N. Haass. Read and download »