International Finance


The Cult of the Expert—and How It Collapsed

Author: Sebastian Mallaby
The Guardian

Sebastian Mallaby uses the framework of central bank power to examine the rise and recent decline of the cult of the expert. He concludes that, ironically, experts need to play the political game if they hope to maintain their legitimacy; and that a healthy democracy is well served by a mix of public accountability and technocratic independence. 

See more in United States; Monetary Policy; International Finance


Go for the Jugular

Author: Sebastian Mallaby
Atlantic Monthly

In this excerpt from his new book, More Money Than God, on the history of hedge funds, Sebastian Mallaby tells the story of the break-up of Europe's Exchange Rate Mechanism in 1992 from inside of George Soros's Quantum Fund.

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The Future of the Dollar: Currency Challenges in a Globalized World

Author: Benn Steil
Harvard International Review

Benn Steil argues that the world has no attractive alternatives to the current dollar-based international monetary system, but that the dollar's days of coasting on the accomplishments of the Volcker Fed are over. The Fed must demonstrate to the world anew that the dollar is a reliable long-term store of value.

See more in International Finance; Financial Crises


What to Do with Over a Half a Trillion a Year? Understanding the Changes in the Management of China’s Foreign Assets

Author: Brad W. Setser
RGE Monitor

The China Investment Corporation’s $5 billion investment in Morgan Stanley, its $3 billion investment in Blackstone and the China Development Bank’s likely $2b investment in Citigroup have attracted an enormous amount of attention.  In this paper for RGE Monitor, Brad Setser examines the unprecedented growth in China ’s foreign assets, the key institutions managing these assets, and the composition of China's aggregate external portfolio.

See more in China; United States; International Finance


Understanding the New Financial Superpower - The Management of GCC Official Foreign Assets

Authors: Brad W. Setser and Rachel Ziemba
RGE Monitor

With oil at $100, what do we know about how the big oil exporters are managing their petrodollars? In this paper for RGE Monitor, Brad Setser and Rachel Ziemba examine the different GCC funds and estimate that total Gulf investment abroad exceeded $2 trillion in 2007.  One surprising conclusion that emerges from their analysis is that the Gulf as a whole has not diversified away from the dollar.

See more in Middle East and North Africa; Regional Security; International Finance