Archive for January, 2011
Gary Clyde Hufbauer says that while the specific trade disputes the United States has with China are in line with the levels experienced with other countries, those with China are likely to grow.
As Europe’s financial market contagion spreads to systemically important eurozone members, the region is echoing with “end-game scenarios” and demands for major new steps by European policymakers. Among these would be a European “fiscal transfer union,” a new common eurozone bond, action by the European Central Bank (ECB) to monetize sovereign debts, and finally a eurozone breakup itself.
It has been 80 years since John Maynard Keynes first proposed a plan that would have disciplined persistent surplus countries. But the Keynes Plan, like the subsequent Volcker Plan in 1972–74, was defeated by the major surplus country of the day (the United States and Germany, respectively), and today China (not to mention Japan or Germany) exhibits no enthusiasm for new revisions of these ideas.