October 27, 2004
Financial MarketsSometimes 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…
November 7, 2004
United StatesNouriel 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…
November 28, 2004
Budget, Debt, and DeficitsThe 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 …
November 21, 2004
Capital FlowsGetting 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…
December 10, 2004
Emerging MarketsYields 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 …
December 18, 2004
Now that we have three of the four data points for 2004, it is worth trying to make a (well) informed guess about the end of the year current account deficit -- and to peer into 2005. This post of c…
December 19, 2004
The 1985 Plaza accord sought to drive the dollar down; the 1987 Louvre sought to keep the dollar from falling further. There is growing talk of a new Plaza in the US -- though not in the circles tha…
December 7, 2004
Capital FlowsMonday’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…
December 7, 2004
United StatesOr 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…
December 8, 2004
Budget, Debt, and DeficitsIt 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…