The economic costs of the Japanese earthquake will be major, but are unlikely to derail the Japanese or global recovery. However, a number of risks—beginning with unresolved nuclear crisis—could worsen the outcome considerably. […]
In order to prevent another boom-bust episode—this time in developing countries—policy makers must act soon to cool the rising temperatures in several rapidly growing emerging markets. […]
If asset prices and currency values overshoot and inflation surges, there is a risk that emerging markets will be hit with another potentially devastating financial crisis. […]
The recent emphasis on global economic rebalancing stokes current tensions and contributes to protectionist sentiment while diverting attention away from what is really needed—domestic reforms in the world’s largest economies. […]
As fears rise over currency clashes, policy makers must confront the challenges of a two-speed global economy where China and other emerging markets are surging ahead while Europe, the United States, and Japan face a number of serious economic concerns. […]
Policy makers around the world who are pushing China to revalue its exchange rate should note that an appreciation of the renminbi—unless accompanied by an acceleration of China’s domestic demand—will be of little benefit to most economies. […]
An examination of past episodes of currency tension suggests that competitive devaluations are not likely today. But the forces behind past collapses remain highly relevant and policy makers cannot afford to be complacent. […]
Policy makers should heed the lessons of the Great Recession and enact the structural and regulatory reforms needed to protect the world against the next crisis. […]
Faster growth in the G20 must come through increased demand in advanced nations—beginning with the United States and Germany—rather than agreements about currency appreciations or current account targets. […]
Threats of a currency war hang in the air, but few countries have actually seen their exchange rate appreciate significantly. Major world economies should refocus on domestic policies before the rhetoric turns into reality. […]
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