On December 21, the International Monetary Fund published a working paper on financial imbalances within Europe. Germany is the largest creditor country, Spain the largest debtor.
On December 20, the IMF published a working paper on the origins of the global financial crisis. It finds that international capital flows were a primary cause by compressing the spread between long- and short-term interest rates.
On December 13, the IMF published a working paper which found that income uncertainty explains much of China’s high saving rate.
Also on December 13, the U.S. International Trade Commission published a report on the impact of the infringement of intellectual property by China and its innovation policies on the U.S.
In a December 10 commentary, Harvard economist Dani Rodrik said that recent events suggest that the euro area may need to break up, at least temporarily.
In a December 9 commentary, University of California, Berkeley, economist Barry Eichengreen said that the best solution for the European debt problem is for debts to be written down, forcing losses onto bondholders rather than taxpayers.
On December 2, the International Monetary Fund published a working paper that examined the extent to which corporate saving in China is responsible for that country’s extraordinarily high national saving rate. It finds that corporations in China don’t save more than those elsewhere.
Also on December 2, Harvard economist Ken Rogoff published a commentary expressing concern that Europe is following the same path that led to a debt crisis in Latin America in the 1980s by effectively nationalizing private debts.
In a December 1 paper, economists Marcos Chamon, Kai Liu, and Eswar Prasad argue that a key reason for China’s high saving rate is extreme income uncertainty, which forces people to hold high levels of precautionary saving.
On December 1, the Bank for International Settlements posted data showing that turnover in the foreign exchange market worldwide was $4 trillion per day in April, up 20 percent from a year earlier.
Also on December 1, University of California, Berkeley, economist Barry Eichengreen published a commentary that was highly critical of the European debt rescue package for Ireland. The debt has not been reduced and its burden will be increased by forcing Ireland to deflate its economy.
I last posted items on this topic on November 30.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).
