Sometimes you read something and it makes you stop, because it is at odds with your existing sense of how the world economy is working. Drossos and Kinbrough’s argument that China does not rely on a…

Nouriel and I have just posted our updated analysis of US external sustainability, i.e. the United States capacity to continue to run large trade and current account deficits.The paper is certainly l…

The U.S. Treasury needs to get its talking points straight. It is hard for the Treasury to argue that the world economy is doing very, very well (the IMF forecasts global growth to be at a 30 year h…

The typical price of irresponsible fiscal policy is higher long-term interest rates.U.S. fiscal policy has been, in my view, somewhat irresponsible, particularly given the lack of private savings in …

Getting agreement from the Paris Club creditors to write off 80% (in stages) of the $40 billion or so that Iraq owes them is no doubt a good thing -- not the least because it lets the US (and Iraq) p…

Yields on Latin American bonds have not been this low for a long time. It is hard to believe that Brazil’s 20 year dollar bond trades at a yield of only 8%, and most long-term Brazilian bonds are in …

Isn’t that what a revenue neutral flat tax or a national sales tax implies, particularly one that exempts investment income from any taxation? (as Cheney reportedly is pushing). In all honesty, it …

Monday’s FT had the story, drawing on this just released BIS report. It seems OPEC countries are holding fewer dollars and more euros in their external bank accounts. (Thanks to Marcel for alerting…

Or more precisely, one of this year’s Nobel Prize winners in Economics seems to disagree with parts of the analysis Nouriel and I have been putting forward. It seems like Nouriel and I don’t underst…

It seems like America’s biggest creditors stepped up to the plate today. China’s rapidly growing reserves have to go somewhere ... From Bloomberg:"So-called indirect bidders, which include the forei…