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The augmented misery index for the second half of 2011 improved dramatically compared with the first half, largely reflecting the sharp decrease in “headline” consumer price index and the biggest increase in housing prices since the end of 2009, write Gary Clyde Hufbauer and Woan Foong Wong. Listen to related interview.

Simon Johnson testifies that if big banks are allowed to gamble with proprietary trading, their losses will ultimately be borne by the American taxpayer.

Rather than imposing taxes on foreign corporations, congress should focus on corporate tax reform that puts US companies on the same competitive playing field as their foreign rivals, writes Gary Clyde Hufbauer. Policy Brief 12-3.

The latest semiannual estimates of fundamental equilibrium exchange rates (FEERs) by William R. Cline and John Williamson find that modest appreciation of the renminbi against the dollar, combined with higher inflation in China than in the United States, has narrowed the undervaluation of the Chinese currency from 16 percent in April to 11 percent in late October. Policy Brief 11-18. Listen to related interview China's Currency: Modest Appreciation but Still Undervalued.

Anders Åslund writes that the Gaidar Forum offers a good overview of Russia's current ongoing economic policy discussion.

Peterson Perspectives Interviews

 Economic Crisis in Egypt: Enter the IMF

with Mohsin S. Khan

 Ratcheting Up Economic Pressure on Iran II

with Mohsin S. Khan | Transcript [pdf]

 Ratcheting Up Economic Pressure on Iran I

with Jeffrey J. Schott | Transcript [pdf]

Gary Clyde Hufbauer and Julia Muir assess whether latest developments in Japan's postal reform legislation represent true reform or will camouflage an entrenchment of Japan Post's formidable monopoly powers. Policy Brief 12-2.

Edwin M. Truman examines three interrelated steps through which the international monetary system [pdf] can and should be improved: surveillance, adjustment and reserve accumulation, and an institutionalized global swap network. See also Policy Brief 11-19.

Recent adjustments to the US regulatory framework, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, have not fixed the core problems [pdf] that brought the United States to the brink of complete catastrophe in fall 2008, testifies Simon Johnson.

Edwin M. Truman investigates the purpose of Asian regional policy coordination and whether Asian regional policy coordination will come to replace or complement global policy coordination. Working Paper 11-21.

The main goal of those who wish to democratize Russia should be to break the power of the corrupt elite, writes Anders Åslund.

Edmund Malesky, Dimitar Gueorguiev, and Nathan Jensen show that openness to foreign investment can have differential effects on corruption, even within the same country and under the exact same domestic institutions over time. Working Paper 11-20.

At the United Nations climate change conference in Copenhagen in 2009 and Cancun in 2010, the United States joined other developed countries in pledging to mobilize $100 billion in funding to help developing countries reduce greenhouse gas emissions. Trevor Houser and and Jason Selfe argue in Working Paper 11-19 that Washington's best hope is to use limited public funds to leverage private sector investment through bilateral credit agencies and multilateral development banks.

New Book: The Arab Economies in a Changing World, Second Edition
by Marcus Noland and Howard Pack

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Most viewed pages for the past 7 days.

Congressional Testimony The Outlook for the Euro Crisis and Implications for the United States
C. Fred Bergsten

Policy Brief The Coming Resolution of the European Crisis
C. Fred Bergsten and Jacob Funk Kirkegaard

Event Italy's Effect on the Global Economy
Italian Prime Minister Mario Monti

RealTime Economic Issues Watch How Euro Brinkmanship Is Beginning To Succeed
Jacob Funk Kirkegaard

Policy Brief The European Crisis Deepens
Peter Boone and Simon Johnson

Congressional Testimony Outlook for the Euro Area
Simon Johnson

Speech Globalization: The Concept, Causes, and Consequences
John Williamson

Policy Brief Interest Rate Shock and Sustainability of Italy's Sovereign Debt
William R. Cline

RealTime Economic Issues Watch A Greek Escrow Account for Bondholders Could Put New Pressure on Athens
Jacob Funk Kirkegaard

North Korea: Witness to Transformation China Update: from Words to Deeds
Stephan Haggard

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Most recently posted material.

RealTime Economic Issues Watch The KORUS Blues
Marcus Noland — February 13, 2012
Setting aside Syria, South Korea may be the only country in the world with politics more polarized than the United States. While in Seoul last week I was reminded of this when the leaders of the political opposition attempted to march on the US embassy to deliver letters addressed to President ...

RealTime Economic Issues Watch Iran's Food Supply Gets Pinched
Trevor Houser — February 10, 2012
Washington and Brussels are trying to curb Iranian oil revenue in a bid to convince Tehran to abandon its nuclear weapons program. But it appears financial sanctions imposed by the West are having a more immediate impact on what Iran buys from abroad rather than what it sells. Reports thi ...

Event Debt Relief for Egypt?
Robert D. Hormats, John Williamson, Mohsin S. Khan and Lionel C. Johnson —February 10, 2012
With the Egyptian government seeking debt relief, and the United States and other major creditor countries actively considering it, Senior Fellows John Williamson and Mohsin S. Khan presented the main conclusions and policy recommendations of their policy brief on the issue at a Peterson Institute event held February 10, 2012.

Speech Italy's Effect on the Global Economy [pdf]
Mario Monti — February 10, 2012
I really want to underline how all of us involved in policy observing or in policy making have been benefitting from the Peterson Institute's work and from Fred's leadership in this and also in other, broader contexts. So I think there could be no better place for me to share with a highly-qualified audience a few reflections on this time, the economic future of Italy and Europe.

RealTime Economic Issues Watch Europe’s Fiscal Union Still Lacks a Blueprint
Nicolas Véron — February 10, 2012
The improvement of euro area market conditions in January can be attributed to several factors, including the progress made by Prime Minister Mario Monti in Italy, and some constructive if Delphic signals coming from Berlin. It also suggests ...

China Economic Watch The Myth of China’s Giant Fiscal Deposits
Nicholas Borst — February 9, 2012
There is a recurring notion that pops up every now and then that the Chinese government has a giant rainy day fund. When growth slows but banks are constrained in expanding lending, analysts start to call on China to tap into these reserves to finance fiscal stimulus. Macquarie: ...

Event Italy's Effect on the Global Economy
Mario Monti —February 9, 2012
Prime Minister Mario Monti of Italy addressed how the economic situation in his country and Europe may affect the world economy. He delivered his remarks at the Peterson Institute on February 9, 2012, during his first visit in office to the United States.

Policy Brief 12-5 Interest Rate Shock and Sustainability of Italy's Sovereign Debt [pdf]
William R. Cline — February 9, 2012
Contagion from Greece, together with domestic political uncertainty in Italy, caused interest rates on Italian sovereign debt to spike in the second half of 2011. By January 2012, however, the short-term rate had fallen sharply and the long-term rate had eased as well. But this improvement is by no means assured to continue. Cline examines the sensitivity of the Italian public debt outlook to a new higher interest rate environment, as well as to possible shortfalls from fiscal targets. In terms of long-term solvency, Italy is not close to a precipice and could keep its debt ratio from escalating even if the recent peak interest rates on its debt (about 7 1/2 percent) were to return and persist for a long time (but rise no higher). However, there is a considerable chance that Italy would face a severe liquidity squeeze under these circumstances. It thus behooves the official sector in Europe and internationally to move quickly to provide some credible lender of last resort vehicle in the immediate future.

RealTime Economic Issues Watch A Greek Escrow Account for Bondholders Could Put New Pressure on Athens
Jacob Funk Kirkegaard — February 8, 2012
The idea of a European Union Budget Commissar to ensure Greek compliance with its reform commitments was floated at a recent European Council meeting—and just as quickly killed as politically impossible to implement. Now Chancellor Angela Merkel of Germany and President Nicolas Sarkozy ...

Peterson Perspectives Interview Will French Voting Test Franco-German Ties?
Nicolas Veron — February 7, 2012
Nicolas Véron assesses the contest between President Nicolas Sarkozy and the socialist Francois Hollande, and the implications for European integration.

Op-ed Europe's New Fiscal Compact Treaty Does Not Outlaw Keynesianism and Is a Stepping Stone to More Progress
Jacob Funk Kirkegaard — February 6, 2012
In record time since the idea was first mulled over at the EU Council on December  9, 2011, Europe has compiled a new fiscal compact treaty. Angela Merkel called it a "masterpiece" on the night of its final approval on January 30. It is perhaps unsurprising, though, that not everyone agrees. Many policymakers and economists—particularly those in English-speaking or peripheral European countries—have quickly dismissed the new fiscal compact treaty as an economic disaster for Europe that, true to caricatures of German policies, forever outlaws Keynesian countercyclical policies.

Peterson Perspectives Interview Taking the Measure of China's Future Leader
Nicholas R. Lardy — February 6, 2012
Nicholas R. Lardy says the United States will use the visit of Vice President Xi Jin Ping to assess where US-China relations are going in the next decade.

Peterson Perspectives Interview Is Europe's Shadow Lifting from the United States?
Jacob Funk Kirkegaard — February 3, 2012
Jacob Funk Kirkegaard argues that the latest progress in solving the euro debt crisis is easing the threat of damage to the fragile US recovery.

China Economic Watch Can Affordable Housing Sustain China’s Economic Growth?
Nicholas Borst — February 3, 2012
China’s affordable housing program is considered by many to be a ray of hope in what is otherwise a bleak property market. CLSA’s China Macro Strategist Andy Rothman was memorably quoted as being comp ...

RealTime Economic Issues Watch How Euro Brinkmanship Is Beginning To Succeed
Jacob Funk Kirkegaard — February 3, 2012
European Union leaders had the umpteenth euro crisis summit at the end of January. Indeed the EU Council meets so often that the descriptions of these gatherings should be changed from "yet another summit" to "back in session." The slide to near-permanent policymaking has occurred as the ...