The global recovery is strengthening and growth in 2010 is likely to be modestly higher than consensus estimates, but the crisis in Greece—and its possible spread to other Euro area countries—poses a significant risk. […]
As the Euro crisis continues to play out in Greece and other weak Euro area members, the time has come for policy makers to consider moderately raising their inflation targets. […]
History shows that while leaving the Euro area and defaulting would have disastrous implications for Greece and Euro area, it may become the best of bad options if Greece does not receive adequate support from the EU. […]
Exports have become an important contributor to U.S. growth in recent years and will be crucial to the recovery. President Obama’s recently announced target of doubling exports in five years, however, appears overly ambitious. […]
During the financial crisis, exchange rates adjusted in a remarkably orderly way. Policy makers should be aware, however, that severe exchange rate tensions still require their attention. […]
Skyrocketing government debt is emerging as a new risk to the global recovery, prompting calls for stimulus withdrawal. Sustaining growth, however, should remain policy makers’ top priority. […]
The Obama administration’s deadline for Iran to enter discussions on the nuclear issue has passed. In spite of claims from Washington that “all options are on the table,” the economic crisis makes a military response to Iran infeasible. […]
Recovery came faster than expected in 2009 and forecasts seem to be underestimating the outlook again—this time for 2010. The consequences of underestimating growth remain milder than those of overestimating it, however, and policy makers should not accelerate stimulus withdrawal. […]
The Copenhagen Accord represents a step forward in dealing with the climate change, but two problems—the insistence on binding, internationally-agreed-upon targets and the conflation of the mitigation and aid agendas—should be avoided in the future. […]
While China’s role in global trade is continuing to grow, the dollar, not the yuan or the euro, will remain the world’s leading reserve currency for the foreseeable future. […]
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