EconoMonitor

Peterson Institute for International Economics

Roubini Topic Archive: Markets

  • China: Capital Stock….and Flow

    Recently there have been several articles written on the China’s capital stock. The argument in most of these pieces is that China’s capital stock per capita is low and thus claims of overinvestment in China are incorrect. Just to recap, the capital stock is a broad measure of the existing physical capital in an economy. […]

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  • Gasoline Prices and Electoral Politics in the Age of Unconventional Oil

    With average US gasoline prices approaching $4 per gallon, markets are trying to gauge the impact of high oil costs on a fragile US economic recovery. Some analysts have argued that surging unconventional oil production in North America will make this price spike less harmful than those in the past. But for the political class, […]

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  • Is the Risk Free Status of Euro Area Sovereign Debt in Tatters?

    In the first week of March, the euro area experienced the biggest sovereign debt restructuring in history and the first ever triggering of sovereign credit default swaps (CDSs) for an industrialized country. Yet nothing happened after these events struck Greece. It was a market non-event that was fully anticipated. For the often maligned euro area […]

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  • China: Capital Account Liberalization and the Corporate Bond Market

    The People’s Bank of China (PBoC) released a report (Chinese language) this week that focused on prospects for capital account liberalization. Opening up the capital account would be a major reform, perhaps the most significant in a more than a decade. It would give Chinese savers an escape hatch from financial repression and force the […]

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  • On Greece, Growth, and Downgrades

    Events remain unsettled in the euro area in 2012 in spite of some recent progress toward stabilizing the fiscal and financial outlook. To begin with, negotiations between the Greek government and private creditors represented by the Institute for International Finance (IIF) have been suspended as they enter the final critical phase, with each side considering […]

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  • The Failed Political Economy of the Euro Crisis

    The euro crisis has been extensively discussed in terms of economics, finance, political intrigues, and European institutions, but a key aspect—the political economy of the crisis—has received little attention. Politicians and social scientists from emerging economies, not least from Eastern Europe, look with amazement at this oversight. Europeans need to absorb and apply the lessons […]

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  • The Next Strategic Target: De Gaulle’s EU Legacy

    When Mario Draghi delivered his first prepared public remarks as president of the European Central Bank (ECB) in Frankfurt on Nov. 8, he provided several clues about the coming eight years. Conscious of taking charge in the midst of the bank’s and the euro area’s first major financial crisis, he dwelled first on monetary policy, […]

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  • 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 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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