Peterson Institute for International Economics

Roubini Topic Archive: Advanced Economies

  • The Internal Cost of China’s Currency Policy

    By Joseph E. Gagnon, Nicholas R. Lardy, and Nicholas Borst It is currently costing the Chinese central bank about $240 billion per year to hold down the value of the Chinese currency relative to other currencies.  This cost is growing rapidly.  The cost would decrease significantly if China allowed its currency to float and began […]

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  • The G-20’s Action Plan on Food Price Volatility and Agriculture

    The G-20 Agriculture Ministers met in Paris last June 22 and 23 to tackle the issue of food price volatility with the goal to improve food security. The Ministerial Declaration “Action Plan on Food Price Volatility and Agriculture” is a 24-page document whose main objectives are: 1) improve agricultural production and productivity to respond to […]

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  • A Quick Guide to the Upcoming Contest for the Next MD of the IMF

    By Arvind Subramanian and Nicolas Veron This note provides a quick guide—in the form of a table—to the likely candidates to succeed Dominique Strauss-Kahn as next Managing Director (MD) of the IMF, assuming that he resigns shortly. It also highlights some key points that must guide the process of selecting the next MD.

    Need for urgent action. The IMF is at a critical juncture with lots of problems to solve, not least in Europe. A leadership vacuum and uncertainty must be avoided, which requires urgent initiatives by the larger players—the United States, Europe, China, Brazil, India, South Africa and others.

    Europe can no longer claim the job of MD: Europe no longer has the divine right to this job, irrespective of the circumstances of the European incumbent’s (assumed) departure. The world has changed, and antiquated if unstated arrangements dating from 1945, in which a European heads the IMF and an American heads the World Bank, must keep pace with reality. The next MD must be selected on the basis of merit, which is not to be found only in Europe.

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  • The Future of the IMF

    IMF Managing Director Dominique Strauss-Kahn’s detainment in New York City on Saturday has raised questions about the future of the International Monetary Fund (IMF).  The short answer to those questions is that the IMF will continue to do its job effectively with or without Mr. Strauss-Kahn as its leader.  No individual is or should be indispensable to an institution, and the IMF is no exception to this rule.  The IMF has a talented management team, a dedicated staff, and a broadly supportive membership.

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  • Japan: An Opportunity Slipping Away?

    Last month, in a Washington Post outlook piece, I argued that if handled adroitly, the triple crisis facing Japan could be used to modernize the country’s politics. The government’s response to the disaster has been anything but adroit, and the opportunity to use the crisis to propel the nation forward is slipping away.

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  • Bernanke Did Not Bomb

    On Wednesday afternoon, April 27, 2011, Federal Reserve Chairman Ben Bernanke gave the first scheduled press conference by a Federal Reserve chairman immediately following a meeting of the Federal Open Market Committee (FOMC).  Chairman Bernanke was sure footed and appeared not to be surprised by any of the questions. He answered most of the questions directly, although, like any public official, he did not always answer the question precisely and sometimes declined to do so.

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  • Does Japan Need a FEMA?

    On Sunday the Tokyo Electric Power Company announced that they had found puddles at the damaged Fukushima nuclear facility’s No. 2 reactor containing extraordinarily high levels of radioactivity—10 million times higher than would be found in water in a normally functioning nuclear reactor.  Thirty minutes later they retracted the statement.

    Thankfully the markets were closed and beyond the temporary scare, no lasting damage was done.  But more serious problems have plagued the recovery effort and the Japanese political system is beginning to confront the possibility that emergency management reforms introduced after the 1995 Kobe earthquake have been inadequate.  

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  • The Shadow Cast by U.S. Debt

    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.

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  • Why Portugal Needs a Bailout in One Chart

    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.

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  • A Breakthrough on the Reminbi?

    There are encouraging signs that a breakthrough may have been achieved in the long-running debate over the exchange rate of China’s currency, the renminbi. Its real rate against the dollar is now rising at an annual rate of 10 to 12 percent, which if continued would complete the needed correction of 20 to 30 percent over two to three years, and official US reactions suggest that assurances that the adjustment will continue may have been received. This movement appears to derive from effective US pressure, increasing expressions of concern about the issue from other countries (especially a number of major emerging markets) and, most importantly, changes in economic conditions in China itself.

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