The Internationalisation of the Renminbi

According to Dan Steinbock, the internationalisation of the renminbi is accelerating. The inclusion of the yuan in the IMF basket of reserves is now a matter of time. On August 11, the People’s Bank of China (PBOC) adjusted the exchange-rate of the Chinese renminbi (RMB) against the US dollar to better reflect market conditions. The net […]

Small Is Beautiful… but Vulnerable!

Many small states are known for their pristine natural environments and are either tourism or commodity based. However, despite numerous challenges emanating from their specific vulnerabilities and small size, the issues faced by these countries have remained somewhat veiled and unaddressed.  Many of these countries are highly exposed to the most disastrous consequences of climate […]

Greece: Don’t play with fire, but don’t sweep it under the carpet

Greece’s government is absolutely right that it cannot further cut budget expenses and raise taxes imposed already on the people in order to have funds to endless repaying of the foreign debt. That would be wrong, since it is not just socially unacceptable, but also economically irrational. Thus far, the implemented policies have succeeded in […]

Global Stability, National Responsibilities

The global financial crisis demonstrated clearly how the flow of money across borders could deepen and widen a financial crisis. A decline in U.S. housing prices led to a re-examination of the safety of financial securities based on them and an implosion in credit markets as financial institutions sought to re-establish their soundness by shedding […]

Dealing with the Fallout from U.S. Policies

The divergence of monetary policies in the advanced economies continues to roil financial markets. The Federal Reserve has reacted to better labor market conditions by ending its quantitative easing policy. The Bank of Japan, on the other hand, will expand its purchases of securities, and the European Central Bank has indicated its willingness to undertake […]

Is the BRICS Contingent Reserve Arrangement a Substitute for the IMF?

Russian President Vladimir Putin has hailed the new BRICS contingent reserve arrangement (CRA) as a substitute for the IMF, saying that it “creates the foundation for an effective protection of our national economies from a crisis in financial markets.” But does it? Under the terms of the arrangement, China can, without being on an IMF […]

Hard Work and External Help: How to Successfully Conduct Macroeconomic Adjustment With Official Assistance

What are the factors that ensure a successful and durable completion of a financial assistance programme? Past experience with IMF-supported adjustment programmes underlines the importance of external conditions but also of fiscal consolidation, financial repair and structural reforms. These findings vindicate the strategy pursued in recent adjustment programmes in the euro area: putting the fiscal […]

Ukraine, Greece, and the IMF: Déjà Vu All Over Again?

The IMF approved a $17 billion 24-month stand-by lending arrangement with Ukraine at the end of April.  The Fund sees the Ukrainian economy contracting 5% this year, but is enormously confident that its program will quickly set things right, projecting 2% growth next year and 4%+ growth in subsequent years. We’ve seen this storyline before […]