LONDON: The European Monetary Union, as many of its critics maintain, looks a lot like the pre-1913 gold standard, which imposed fixed exchange rates on extremely diverse economies. But is that resemblance as bad as it sounds, or as the euro's (...)
PRINCETON: Europe's debt crisis has piqued Europeans' interest in American precedents for federal finance. For many, Alexander Hamilton has become a contemporary hero. Perhaps one day his face should appear on the €10 banknote.
Specifically, for (...)
PRINCETON: The alternatives for Europe's currency, the euro, seem increasingly limited to a desperate muddling through or a chaotic collapse. But there is a bolder and more productive approach that relies on past experience with multiple (...)
PRINCETON: The protracted financial and economic crisis discredited first the American model of capitalism, and then the European version. Now it looks as if the Asian approach may take some knocks, too. Coming after the failure of state socialism, (...)
PRINCETON: The purpose of creating a common currency has been largely and surprisingly forgotten in crisis-torn Europe. Instead, there seem to be more pressing concerns: gloomy speculation about the eurozone's impending collapse and desperate (...)
PRINCETON: Today, the world is threatened with a repeat of the 2008 financial meltdown — but on an even more cataclysmic scale. This time, the epicenter is in Europe, rather than the United States. And this time, the financial mechanisms involved (...)
MUNICH: Big economic crises often cause iconic companies to falter. Rupert Murdoch's media empire is a model of the modern global enterprise. A particularly dynamic and innovative business model came from outside and took over central aspects of (...)
PRINCETON: Summits are defined by their location. It is quaint that the 1933 World Economic Conference took place in the Geological Museum in London's Kensington, at a time when international cooperation seemed as alien as a fossilized dinosaur. On (...)
PRINCETON: How the mighty International Monetary Fund has fallen. More than a decade ago, the French magazine Paris Match carried a picture of the Fund's then Managing Director, Michel Camdessus, with the title: “The Most Powerful Frenchman in the (...)
PRINCETON: Can central banks contain inflation? We once thought they could. Over the past 20 years, central banks around the world, including the United States Federal Reserve, pursued price stability with remarkable success. But now, in the wake of (...)
FLORENCE: The term “globalization” first swept the world in the 1990's and reached its highpoint of popularity in 2000 and 2001. In 2001, for instance, Le Monde contained more than 3,500 references to mondialisation. But then the figure steadily (...)
PRINCETON – The European Union's sovereign-debt crisis constitutes a fundamental threat not only to the euro, but also to democracy and public accountability. At the moment, Europe's woes and dilemmas are confined to relatively small countries like (...)
PRINCETON: Crises are a chance to learn. For the past 200 years, with the exception of the Great Depression, major financial crises originated in poor and unstable countries, which then needed major policy adjustments. Today's crisis started in rich (...)
PRINCETON: Britain's policy of fiscal consolidation, recently announced by Chancellor of the Exchequer George Osborne, sent shock waves around the world. Osborne argued that Britain was on the brink: that there was no alternative to his policy if (...)
PRINCETON: The most noteworthy commemoration of the second anniversary of Lehman Brothers' collapse on Sept. 15, 2008, was Japan's unilateral currency intervention to depreciate the yen. That move marks a shift in the character of the global (...)
FLORENCE: The news that China has overtaken Japan as the world's second largest economy did not come as a surprise. This is the major geo-political outcome of the Great Recession of the early twenty-first century — one that carries both economic (...)
FLORENCE: The stress tests applied to American banks last year are widely credited with restoring financial stability in the United States and removing the fear that major financial institutions might fail. Europeans hope that the recent publication (...)
FLORENCE: After the European Central Bank announced on May 9 that it would buy the government bonds of Mediterranean countries experiencing severe fiscal strains, critics complained that the Bank had “lost its virginity.” The actions looked like a (...)
FLORENCE: Fears about sovereign debt and doubts about the euro rescue package have pushed the question of international reserve currencies to the fore. Until this spring, most observers had assumed that the share of the dollar in international (...)
FLORENCE: British politics has always been something of an experimental laboratory for the industrialized world. In the 1970's, Britain was where the preeminent postwar model of how to manage the economy collapsed. That model had been based (...)
FLORENCE: Richard Nixon has been dead for 15 years, but he is making another comeback in America. The 37th President of the United States believed that international monetary relations are unlikely to be transformed by talking. Instead, he thought (...)
FLORENCE: It is too simplistic to explain the current wave of concern about the euro in terms of Greece's problems. Greece has massive fiscal and competitiveness problems, but Greece (2.25 percent of the population of the European Union) is smaller (...)
FLORENCE: Former Federal Reserve Board Chairman Paul Volcker provided the central inspiration for President Barack Obama's proposal for overhauling banking. Without question the most successful central banker of the 20th century, Volcker was an (...)
FLORENCE: Severe banking crises bring painful and long-lasting disruptions. But they also lead to surprises. The lessons learned in the immediate aftermath bear little relationship to the eventual outcome. There are immediate and obvious answers to (...)
FLORENCE: The nineteenth century was mesmerized by the cyclical behavior of business. The French economist Clement Juglar became famous for establishing that business cycles ran for around nine or ten years. We have recently had our own cycles of (...)