Archive for March, 2011
Carmen M. Reinhart discusses how history teaches that large public and private debt impedes economic growth, a lesson that the United States must heed in the years ahead.
Edited transcript, recorded February 18, 2011. © Peterson Institute for International Economics.
Steve Weisman: It’s budget season, and Washington is dealing with steps to curb the American overhang of debt. This is Steve Weisman at the Peterson Institute for International Economics and with pleasure I welcome Carmen Reinhart, new senior fellow here at the Institute, for her first Peterson Perspectives interview. Thanks for joining me, Carmen.
Compared to other regions of the world, the Middle East was once unique in its combination of authoritarianism and stultifying stability. No longer. Beginning in Tunisia, a wave of political upheaval has rolled across the region, reaching Egypt, Bahrain, Libya and other countries caught between rising expectations and their antediluvian political systems, abetted by pan-Arab news channels and social networking media.
With Portuguese interest rates above the 7 percent level at which their sovereign debt—even if it is considerably lower than that of say Greece—becomes unsustainable, the point in time at which the country will be forced to accept an EU-IMF financial assistance package looks imminent.
The recent overthrow of President Mubarak offers great hope for Egypt’s future political development. But the challenge of economic transformation will be no less important, and arguably as difficult. This challenge is viewed as one of achieving greater globalization and a greater role for markets inside Egypt. The more fundamental challenge, however, is different.