The Dismal Economist

The Economist pubished a piece on the positive and negative effects of currency intervention (“Trial of strength. Will today’s currency interventions hurt or help the world economy?”). The article highlights the problems with unilateral and unco-ordinated intervention, where all countries effectively seek to lower the value of their own currency: As the recovery slows, a […]

I’m in Beijing this week for a conference on Regional Financial and Regulatory Cooperation, which is starting tomorrow. Over the past two days I’ve met several colleagues to hear their views on the state of the Chinese economy and the Chinese financial sector. Most Chinese economist I talked to seem pretty optimistic regarding China’s growth […]

US lawmakers and the US government are raising pressure on China to let the yuan appreciate. The New York Times writes: The Obama administration increased its criticism of China’s economic policies on Thursday, as Treasury Secretary Timothy F. Geithner told Congress that China had substantially undervalued its currency to gain an unfair trade advantage, tolerated […]

After months of verbal intervention, Japan intervened today in the foreign exchange market for the first time since 2004. The yen had reached a 15 years hight against the dollar, threatening to stunt the nation’s economic recovery. According to Bloomberg, “[t]he yen tumbled past 85 per dollar for the first time in almost two weeks, […]

Paul Krugman seems to be visiting Japan these days, at least he has published his second Japan-related column within a few days. Although, contrary to what the title suggests, it is really more about his pet topic, Chinese undervaluation of the yuan and how it hurts US growth. But he takes the concerns about China’s […]

Tim Hartford wrote a defense of Economists (“Models tell us more than hindsight“), responding to his FT colleague Gideon Rachman‘s demand to “Sweep economists off their throne“. A few days ago, Rachman wrote in the FT: When Paul Krugman, a Nobel prize-winning economist, clashed with Niall Ferguson, a famous historian (and FT contributing editor), over […]

Paul Krugman’s recent NY Times column reviews the Japanese woes of the past two decades and draws conclusions for US economic policymaking: In the 1990s, Japan conducted a dress rehearsal for the crisis that struck much of the world in 2008. Runaway banks fueled a bubble in land prices; when the bubble burst, these banks […]

In today’s FT Martin Wolf tries to persuade my fellow countrymen that the introduction of the euro was actually benefical for Germany (Germans are wrong: the eurozone is good for them). According to a recent public-opinion poll, half of the German population would like to change the euro back into deutschmark. Albeit I have doubts […]

The New York Review of Books recently published an interesting piece, The Slump Goes On: Why?, by Paul Krugman and Robin Wells. Krugman and Wells discuss the origins of the 2008 crisis and the ongoing policy debates about the response to the crisis and its aftermath. In their article they refer to three recently published […]

Last week I had a post arguing that the time was ripe for the Bank of Japan (BOJ) to intervene in the foreign exchange market to halt the appreciation of the yen. Today, the FT writes: The Japanese yen hit another 15-year high on Wednesday despite fresh comments from the Japanese finance minister about the […]