Focus on International Economics

Focus on International Economics

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In a November 29 commentary, Beijing University economist Fan Gang discussed the People’s Bank of China’s policy of tightening monetary policy preemptively to keep inflation from getting out of control.

Also on November 29, the Bank of England published a working paper that examined the relative contributions of an easy monetary policy and international capital flows to the low real interest rates that were the prime cause of overinvestment in housing from the mid-1990s to 2007. It finds that capital flows were a more important factor.

In a November 26 working paper from the Bank for International Settlements, economists Barry Eichengreen and Marc Flandreau argue that the dollar’s displacement of the British pound as the dominant international currency occurred after World War I, rather than after World War II as conventionally assumed.

In a November 25 commentary, MIT economist Simon Johnson explained that a key reason for Ireland’s debt problem is that 20 percent of its GDP is from “ghost corporations” that are based there solely because of the country’s very low corporate tax rate, but contribute little real economic activity.

Also on November 25, the United Nations Conference on Trade and Development released the latest edition of its annual report on the least developed countries. It recommends that the state play a greater role in the development process.

And on November 25, Maplecroft, a consulting firm, published a study examining the efforts of China and India to integrate themselves with energy and raw material suppliers.

In a November 22 commentary, economist Robert Skidelsky expressed concern that the failure of the G20 nations to come to an agreement on exchange rates risks a rerun of the 1930s.

In a November 19 commentary, Peterson Institute economist C. Randall Henning objected to efforts by Germany and France to force Ireland to raise its corporate tax rate in order to stabilize its finances. He says this would be bad for Ireland and is merely an opportunistic effort by Germany and France to penalize a competitor.

On November 18, the International Monetary Fund released a study which found that global imbalances were the most significant cause of the global recession. Lax monetary and regulatory policies were found to be less important than commonly believed.

A November 16 Reuters report said that China is preparing to impose price controls on food to stem inflation.

In an October 28 speech, Deutsche Bundesbank president Axel Weber discussed the problem of global imbalances. Surplus countries need to increase domestic demand and deficit countries need to raise their domestic saving, he says.

An October 19 study by Human Rights Watch detailed the Ethiopian government’s use of foreign aid funds to punish its domestic political enemies and consolidate power.

I last posted items on this topic on November 15.

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. Read his most recent column here . 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).

Bruce Bartlett’s columns focus on the intersection of politics and economics. The author of seven books, he worked in government for many years and was senior policy analyst in the Reagan White House.