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Michael Pettis 118 posts 0 comments

Michael Pettis is a Senior Associate at the Carnegie Endowment for International Peace and a finance professor at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets. Pettis has worked on Wall Street in trading, capital markets, and corporate finance since 1987. Pettis is a member of the Institute of Latin American Studies Advisory Board at Columbia University as well as the Dean’s Advisory Board at the School of Public and International Affairs. He received an MBA in Finance in 1984 and an MIA in Development Economics in 1981, both from Columbia University. He writes the blog .

Political Economy

Why higher US savings won’t save the pandemic-hit economy

Michael Pettis May 27, 2020

By Michael Pettis This post was originally published at China Financial Markets at the Carnegie Endowment for International Peace website According to a May 2020 CNN article, one consequence of the coronavirus pandemic is that “Americans…

Political Economy

MMT Heaven and MMT Hell

Michael Pettis Dec 2, 2019

There are conditions under which governments can create money—or debt—without fear of inflation or excessive debt burdens. There are other conditions under which debt or money creation can lead to inflation and balance sheet problems.

Markets

China Cannot Weaponize Its U.S. Treasury Bonds

Michael Pettis May 28, 2019

A number of recent articles suggest that Chinese officials may reduce their purchases of U.S. government bonds. It is very unlikely that China can do so in any meaningful way because doing so would almost certainly be costly for Beijing.…

Political Economy

What Is GDP in China?

Michael Pettis Jan 18, 2019

Analysts are increasingly skeptical that China’s very high reported GDP growth rate provides a meaningful picture of the economy’s health. There are, however, at least three very different ways that reported GDP can fail to reflect the…

Political Economy

Beijing’s Three Options: Unemployment, Debt, or Wealth Transfers

Michael Pettis Sep 14, 2018

China’s debt problems have emerged so much more rapidly and severely this year than in the past that a growing number of analysts believe that this may be the year that China’s economy breaks. There is no question that China will have a…

Political Economy

China: Choosing More Debt, More Unemployment, Or Transfers

Michael Pettis Nov 18, 2016

China’s success will depend on the extent to which Beijing in 2016 is able to centralize power, to begin to sell off government assets (probably local and provincial, and not central, government assets), to rein in credit growth, and to…

Economy

The titillating and terrifying collapse of the dollar. Again.

Michael Pettis May 10, 2016

This post was originally published at China Financial Markets. By Michael Pettis Foreign perceptions about the Chinese economy are far more volatile than the economy itself, and are spread across a fantastic array of forecasts. On one…

Economy

If we don’t understand both sides of China’s balance sheet, we understand neither

Michael Pettis Sep 4, 2015

These debt-related shocks will occur regularly for many more years, and each shock will advance or retard the rebalancing process so that it affects the way future shocks occur. There are only a few broad paths along which the Chinese…

Political Economy

Do markets determine the value of the RMB?

Michael Pettis Aug 19, 2015

By Michael Pettis Last Tuesday the PBoC surprised the markets with a partial deregulation of the currency regime, prompting a great deal of discussion and debate about the value of the RMB. Part of the discussion was informed by a…

Monetary System

Internal and external balance

Michael Pettis Jun 9, 2015

The global economy is an economic system in which any country’s domestic economy is inextricably linked to other economies through the balance of payments mechanisms. The ability to place events within their global context is consequently…