Roubini Topic Archive: Emerging Markets
Here is what we know about the global economy given the experiences of the past four years: There is a global insufficiency of demand relative to an immense oversupply of labor and productive capacity. The imbalances between high-wage/current-account-deficit/balance-sheet-indebted nations and lower-wage, surplus nations have produced a glut of savings in the latter, relative to the opportunities [...]
This past Sunday, Paul Krugman penned a screed in the New York Times Magazine (entitled, somewhat unflatteringly in my opinion, “Earth to Ben Bernanke”) that expanded on the content of an ongoing debate in the economics blogosphere over the contents of the mind of Federal Reserve Board Chairman Ben Bernanke. Professor Krugman has posited for months [...]
About once a month I am pleased to be asked by my friends at the Indian business news network, NDTV, to share my thoughts on economies and markets. Given the volatility of the past few weeks, and the association I make between disinflation and the pressures on the developed world from emerging markets, I thought [...]
China’s announcement of its intention to resume Yuan exchange rate flexibility is very good news for China, welcome news to President Obama and Treasury Secretary Geithner, and almost completely irrelevant to recovery of the U.S. economy.
To achieve equilibrium with emerging markets (over anything shorter than a generation’s growth timeline), sufficient for the developed nations to be competitive with the low cost BRIC countries – four times more populous – would require either massive appreciation in the value of the currencies of those nations (which the Chinese, at least, will not permit) or relative deflation in the wages, the prices of goods and services, and the real assets of the developed nations. The latter still appears more likely than the former, despite this past weekend’s announcement.