Peterson Institute for International Economics Update Newsletter
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PIIE Update Newsletter
February 25, 2013

"Washington's premier think tank on the global economy"
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The UK Is Very European—in Its Mistakes

Adam S. Posen
  Adam S. Posen It is time for the UK government to recognize that its current economic policies follow the very European patterns they mock: prioritizing macroeconomic discipline over structural reform, pursuing austerity too fast with too little regard for investment, and fussing with public institutions instead of addressing economic problems. Worst of all, the UK government is leaving hugely important economic decisions hanging—such as the EU referendum and the review of the Bank of England's inflation target—much as the euro area does, creating a cloud of uncertainty. These parallels are not only embarassing—these mistaken policies are largely to blame for the poor recovery of the British economy.

>> Read full op-ed

  Policy Brief 13-5
From Supervision to Resolution: Next Steps on the Road to
European Banking Union

Nicolas Véron and Guntram B. Wolff
  Nicolas Veron Special resolution regimes for banks are an attractive alternative to both insolvency and public bailouts and have a compelling track record. The European Council has outlined a complex policy sequence of successive steps including a Single Supervisory Mechanism (SSM), and (implicitly) further steps beyond 2014. It should not prevent Europe from taking decisive action to restore trust in Europe's banks, possibly in anticipation of the SSM's entry into force planned for early 2014.

>> Read full policy brief [pdf]

  Policy Brief 13-4
Reengineering EMU for an Uncertain World

Angel Ubide
  Angel Ubide The euro area crisis has probably passed the acute phase, but it now has chronic and unstable problems of fractured credit markets, high funding costs, very weak growth, and dim expectations. More austerity and reforms at the national level alone will not be enough to stabilize the euro area. To ensure its sustainability, the euro area needs to restore political solidarity, end the debate on default and exit, launch eurobonds, and refocus cyclical policies towards stabilizing the business cycle. Without these steps, the euro will never be a credible and sustainable monetary union.

>> Read full policy brief [pdf]

A New US International Economic Strategy

Robert B. Zoellick
  Robert Zoellick The United States had better wake up: International economic strategy is the new foreign policy. The new Secretary of the Treasury needs to choreograph policies to strengthen the North American economic base, address risks of competitive devaluation in an era of extraordinary monetary policies, break the global logjam on opting trade markets, overcome barriers to gender equality as smart economics, and match priorities of developing economies including for food security and infrastructure.

>> Read full op-ed
>> See also: Cameron's Critics Should Extol His European Vision

Peterson Perspectives Interviews

audio  Prospects for a US-European Trade Deal: Part I
Jeffrey J. Schott says the two sides could use existing trade agreements as a template and complete negotiations in two years.

audio  Prospects for a US-European Trade Deal: Part II
Jeffrey J. Schott says that a transatlantic trade accord as proposed by President Obama could increase trade by as much as $50 billion to $100 billion.

audio  Budget Outlook after the State of the Union: Part I
David J. Stockton says the United States should seek more than the $1.5 trillion in new budget savings proposed by President Obama in order to stabilize its debt.

audio  Budget Outlook after the State of the Union: Part II
David J. Stockton says that if the budget sequester occurs on schedule, it could lower economic growth this year by three quarters of a percent and possibly increase unemployment.

Recent Blog Posts

RealTime Economic Issues Watch   China Economic Watch    North Korea: Witness to Transformation
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Basel III: Europe's Interest Is to Comply

To Be Ireland or Iceland?—The Real Choice Before Cypriot Voters

Why the Irish Bank Deal Matters—Especially for Cyprus

Latvia's Parliament Votes for the Euro

Will Immigration Reform Overlook America's Need for Skilled Labor?
  Will municipal bonds save China's urbanization plan?

Beijing's 2015 Industry Consolidation Targets: Problem or Solution?

Can China Meet its Minimum Wage Goal?

China's New Income Inequality Plan

A Blueprint for Rebalancing the Chinese Economy
  Still More Iran Sanctions

Suzanne Scholte on Human Rights in North Korea

The Semiotics of North Korean Propaganda

Leadership Movements: Kim II and Kim III Compared

Senator Ted Cruz discovers North Korea

PIIE Noted in the News and on the Web

The Washington Post
Japan's Economic Turmoil May Provide an Opening for the United States
The Washington Post reports on presentations made by PIIE Senior Fellow Jeffrey J. Schott and Motoshige Itoh during the Institute's recent conference on the "Economics of Abenomics."

The Washington Times
G-20 Gets Chance to Reshape Banks
PIIE President Adam S. Posen discusses banking regulations and a global trade in services agreement, among other topics, at a Washington Times editorial board meeting.

Preview of Our Next Issue

Policy Brief
LNG Exports: An Opportunity for America
Gary Clyde Hufbauer, Allie E. Bagnall, and Julia Muir

In This Issue

Koichi Hamada The Economics of Abenomics—A Pre-Summit Assessment

Koichi Hamada, Clayton Yeutter, and others speak at a PIIE conference on the economic policy initiatives of Japan's new government, or Abenomics.
Bulgarian Finance Minister Djankov Second Sunrise Emerging Markets Speakers Lecture: Djankov on Bulgaria

Bulgarian Finance Minister Djankov discusses how Bulgaria can achieve European average levels of income in the face of the ongoing euro area crisis and competition from neighboring states.

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