Peterson Institute for International Economics Update Newsletter
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PIIE Update Newsletter
April 15, 2013

"Washington's premier think tank on the global economy"
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  Live Webcast
The Continuing Impact of the European Crisis

Anders Borg, Finance Minister of Sweden
Thursday, April 18, 2013
10:00–11:30 a.m. (EDT)
  The Peterson Institute will webcast a speech by Swedish Finance Minister Anders Borg on the continuing impact of the European crisis on April 18 from 10:00 to 11:30 a.m. (EDT). Minister Borg will review the lessons to be learned from Sweden's record as the most successful European country to weather the global financial crisis of 2008–09. He will also discuss prospects for recovery for the euro area and Europe.

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  Live Webcast
Economic Reforms in India

Palaniappan Chidambaram, Finance Minister of India
Friday, April 19, 2013
1:00–2:00 p.m. (EDT)
  India's Finance Minister, Palaniappan Chidambaram, will discuss his nation's economic outlook and the status of its economic reforms at a session to be webcast live at the Peterson Institute on April 19 from 1:00 to 2:00 p.m. (EDT). Finance Minister Chidambaram has been at the forefront of the Indian government's program to liberalize the economy, encourage foreign direct investment, reduce fuel subsidies, and revive tax reform.

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This is a Golden Age of Global Growth (Yes, You Read That Right)

Arvind Subramanian
  Arvind Subramanian The golden age of global economic growth—in which a growing number of developing countries have caught up with the advanced economies—has mostly survived recent global economic crises. Today convergence is occurring with a vengeance. Developing countries' growth did slacken between 2008 and 2012, from about 4.5 percent to about 3 percent, but the pace at which they were catching up with rich countries did not slow. A structural decoupling is under way in the medium to long term. The rise in living standards in developing countries depends more on what they do themselves and less on the external environment.

>> Read full op-ed

With Cyprus, Europe Risks Being Too Tough on Banking Moral Hazard

Nicolas Véron
  Nicolas Véron Europe has long been far too tolerant of moral hazard in its banking system. But with the Cyprus bailout plan, the pendulum may now be swinging too far in the opposite direction. This danger was made clear when Jeroen Dijsselbloem, the Dutch president of the Eurogroup of finance ministers, rocked financial markets by hinting at a new doctrine that would put the full burden of future bank restructuring on creditors and depositors rather than taxpayers. European leaders must strike a better balance between moral hazard and systemic fragility, and between national fiscal responsibility and European integration.

>> Read full op-ed

The IMF Shouldn't Abandon Austerity

Anders Åslund
  Anders Åslund The International Monetary Fund (IMF) has been effective not only because of its resources but also because it has focused on one issue: financial stability. Last October, however, the IMF argued in its World Economic Outlook that fiscal multipliers—the change in output induced by a change in the government's budget deficit—were larger than previously thought and dampening output more than its economic modelers had supposed. The implication was that fiscal adjustment should be delayed. The Fund was thus departing from its tradition of extending credits only when the countries comply with fiscal adjustment. Today, the Fund is unfortunately doing the opposite: helping the opponents of fiscal reform.

>> Read full op-ed

Peterson Perspectives Interviews

audio  New Threats of War from North Korea: Part I
Marcus Noland says the latest escalation of threats from North Korea are consistent with past patterns, but the dangers of conflict have increased.

audio  New Threats of War from North Korea: Part II
Marcus Noland says that South Korea seems determined to retaliate against a North Korean provocation, making the current situation more dangerous.

audio  The Remarkable Legacy of Margaret Thatcher
Anders Åslund says Margaret Thatcher's program of deregulation, privatization, and opposition to unions changed economic assumptions in Europe and around the world.

audio  India Rejects a Cancer Drug Patent Protection
Arvind Subramanian says the Indian Supreme Court ruling was a careful balancing of interests and a judicious application of the rule of law.

Recent Blog Posts

RealTime Economic Issues Watch   China Economic Watch    North Korea:  Witness to Transformation
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Slovenia Must Handle Its Banking Crisis!

India's Disputed Ruling on Pharmaceuticals and Patents

The Euro Crisis after Cyprus: What We Have Learned

Did Cyprus Set a Dangerous Precedent? Some Further Thoughts

Change Comes (Slowly) to the Bank of England
  Rewriting History: A SAFE Revision Reveals a Different Picture of Balance of Payments and a Mixed Message for Foreign Firms

Shadow Deposits in the United States and China

China's New Populist Urbanization

Local Government Financing Vehicles Under Fire Again

Testimony before the U.S.-China Economic and Security Review Commission
  South Korean Signals: the Role of Humanitarian Assistance

Tales of the Mangyongdae Prize International Marathon Race

Bobby Egan Returns!

Haidar on Iran: Sanctions and Trade Diversion

The AFSC In–and On–North Korea

PIIE Noted in the News and on the Web

Bloomberg News
Editorial - Japan Trade Deal May Revive Globalization
This editorial on Japan joining the Trans-Pacific Partnership trade talks cites PIIE's Policy Analysis 98, which finds Japan’s potential gain from joining the talks is more than $100 billion annually, or 2 percent of GDP, by 2025.

North Korea: A Smuggler's Paradise
Marcus Noland tells CNN that the North Korean city of Chongjin, historically, has been a center of the chemicals industry, and in its depressed state, has become a center of making illegal methamphetamines, which get shipped across the border into China. The smuggling creates meth addicts in China and angers Chinese officials.

ABC Radio (Australia)
Pyongyang Tells Foreigners to Consider Leaving South Korea
Marcus Noland joins Australia's Breakfast talk show to discuss the current tensions between North and South Korea.

ABC Radio (Australia)
North Korea and Sanctions
Marcus Noland engages in an hour-long discussion on how effective sanctions have been on North Korea and the ethical and legal boundaries of sanctions.

Inside U.S. Trade
US, EU Should Use Korea Deals as Starting Point for Trade Talks [subscription required]
Inside U.S. Trade summarizes Policy Brief 13-8, which argues that the United States and the European Union should use their respective bilateral trade deals with South Korea as the basis for a new trans-Atlantic trade agreement. A subscription with is required to read the article.

Preview of Our Next Issue

Five Myths about Taxes
Steven R. Weisman

In This Issue

Angel Ubide Spain, a Land of Opportunities

Ángel Ubide discusses a paper by Spain's Business Competitiveness Council on the country's competitiveness and potential economic recovery.

Featured Book
Who Needs to Open the Capital Account? Who Needs to Open the Capital Account?

Olivier Jeanne
Arvind Subramanian
John Williamson

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