In the past three decades, the focus in China was on economic reforms. Current changes – including accelerating RMB internationalization – reflect impending financial reforms. China is already one of the world’s largest importers of iron ore and copper, and a force in the gold market. Nonetheless, the story of commodities reflects the kind of … Read more
Amidst a generally dull election season, an incipient social movement calling itself “I’m132” (YoSoy132) is shaking up the presidential campaigns. This decentralized and apparently nonpartisan movement is composed of thousands of students and young people and relies heavily on social media to organize and communicate. Its members appear to be united against what they perceive … Read more
Imagine a low-income country in the developing world suddenly discovering a large endowment of natural resources within its borders. Perhaps a large oil reserve is found just offshore, or a deposit of valuable natural minerals is uncovered just below the earth’s surface. Surely, such a discovery would be a blessing, as it would expand the … Read more
How long can one stand at the crossroads? Well, quite a long time, at least this is the case of Ukraine, a vast country of over 600,000 square kilometers and approximately 45 million people, strategically positioned between the West and the East. While history supposedly had ended twenty years ago, in Ukraine it continues, with … Read more
From the Financial Times: Here we are again. Syria’s government has killed dozens more of its own citizens, and what does its old ally, Russia, do? It obstructs a substantive UN Security Council response. This has long since become a predictable story, but it raises a fundamental question: what is Russia’s place in today’s world? … Read more
The key failing in Krugman’s response to Steve Keen’s response to Krugman’s paper (PDF) is here: If I decide to cut back on my spending and stash the funds in a bank, which lends them out to someone else, this doesn’t have to represent a net increase in demand. Krugman assumes here that people have … Read more
I was on RT’s Capital Account last night talking to Lauren Lyster about the euro zone debt crisis. At the end of the show, we came up against the deficit problem and the question about how it should be solved. I get frustrated by this topic because the whole framing of the problem presented in … Read more
The succession of demand stimulation “packages” may even bring momentary relief but they jeopardize sustained growth. Primum non nocere (first, do no harm) is a basic principle of medical ethics, according to which a doctor should assess, before recommending any course of action, whether it will be more detrimental to the patient’s health than doing nothing … Read more
Andrew Lo, professor of finance at MIT, likened the different financial crisis narratives to Akira Kurosawa’s Rashomon when he recently reviewed 21 books about the financial crisis. Here is the intro. to my Hurriyet Daily News column from two weeks ago, where I went over the two distinct narratives of the Eurozone crisis, and why … Read more
The recent decision by Fitch Ratings to downgrade the Japanese sovereign by one notch, from AA minus to A plus, has all the outward appearance of being a predictable non-event. As the Reuters article reporting the decision puts it, Credit downgrades usually do not have a lasting impact on markets in Japanbecause its government bonds are … Read more