Everyone is working hard to increase global trade imbalances

I suspect most of my readers outside China are more interested in enjoying the holiday season than in spending much time following my blog, while most of my readers inside China are focusing on upcoming exams, but anyway my recent writing commitments are so intense that I haven’t been able to post much recently. For what it is worth I have a short piece appearing soon on YaleGlobal Online about why the US-China trade relationship was the “cause” of the recent financial crisis.

Devaluation In Latvia: Why Not?

The IMF, which recently announced a $2.4 billion agreement with Latvia, has said the ailing Baltic country will not be required to give up its currency peg (the lat is currently pegged to the euro with a ±1% fluctuation band). This is quite an unusual move and is reportedly controversial even within the IMF.

Good news in income growth?

One of my New Year’s resolutions is to be more consistent in responding to questions and comments from the loyal readers of macroblog. Though it remains the case that time constraints prohibit a response to all worthy queries, we’re still listening. Next year we’ll endeavor to give a shout back just a little more often.

Human Nature

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Or, why human beings are bad investors.

Free Exchange has Anthony Gottlieb’s recollections of interviewing Bernie Madoff about financial regulation:

at the time he came across merely as calm, strikingly rational, devoid of ego, and the last person you would expect to make your wealth vanish. I certainly would have trusted him with my money. I cannot say the same of other financial superstars I interviewed. . . . Perhaps it is the most confidence-inspiring ones that you have to look out for.

When will Sterling hit Euro parity?

I caught a good article in today’s Guardian about the British Pound.  The question is: how weak will Sterling get?  My answer is below 1-to-1 with the Euro.  But before I tell you why, let me interject a blurb from the article.

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