By Barry Eichengreen BERKELEY: For more than a half-century, the US dollar has been not only America’s currency, but the world’s as well. It has been the dominant unit used in cross-border transactions and the principal asset held as reserves by central banks and governments. But, already before the recent debt-ceiling imbroglio, the dollar had begun …
By Barry Eichengreen BERKELEY: It should now be clear to even the most blinkered observer that the Greek economy is in desperate need of help. Unemployment is 16 percent and rising. Even after a year of excruciating spending cuts, the budget deficit still exceeds 10 percent of GDP. Residents don’t pay taxes. The system of property …
By Barry Eichengreen BERKELEY: The dollar has had its ups and downs, but the downs have clearly dominated of late. The greenback has lost more than a quarter of its value against other currencies, adjusted for inflation, over the last decade. It is down by nearly 5 percent since the beginning of 2011, matching the lowest …
By Barry Eichengreen BERKELEY: Financial markets are increasingly certain that a Greek debt restructuring is coming, and European policymakers fear the worst. “In the worst case,” as Juergen Stark, a member of the European Central Bank board, has put it, “a debt restructuring of a eurozone member could put the consequences of Lehman’s bankruptcy in the …
By Barry Eichengreen BERKELEY: This is the season for international monetary conferences. In March, national leaders assembled in Nanjing, China, to speechify on exchange and interest rates. And, in early April, leading thinkers and former policymakers met in Bretton Woods, New Hampshire, the birthplace in 1944 of the International Monetary Fund and our dollar-centered international monetary …
By Barry Eichengreen BERKELEY: With the world’s rich countries still hung over from the financial crisis, the global economy has come to depend on emerging markets to drive growth. Increasingly, machinery exporters, energy suppliers, and raw-materials producers alike look to China and other fast-growing developing countries as the key source of incremental demand. But Chinese officials …
By Barry Eichengreen BERKELEY: A strictly economic interpretation of events in Tunisia and Egypt would be too simplistic — however tempting such an exercise is for an economist. That said, there is no question that the upheavals in both countries — and elsewhere in the Arab world — largely reflect their governments’ failure to share the …
By Barry Eichengreen BERKELEY: Complaints about the inflationary effects of American monetary policy are rampant, despite there being barely a hint of inflation in the United States. Rapidly growing catch-up economies are paddling furiously to avoid being dragged down by a torrent of capital inflows. Prominent policymakers, desperate for alternatives to America’s malfunctioning monetary system, …
By Barry Eichengreen BERKELEY: What once could be dismissed as simply a Greek crisis, or simply a Greek and Irish crisis, is now clearly a eurozone crisis. Resolving that crisis is both easier and more difficult than is commonly supposed. The economics is really quite simple. Greece has a budget problem. Ireland has a banking problem. …
By Barry Eichengreen BERKELEY: In the United States, the scent of decline is in the air. Imperial overreach, political polarization, and a costly financial crisis are weighing on the economy. Some pundits now worry that America is about to succumb to the “British disease.” Doomed to slow growth, the US of today, like the exhausted Britain …
