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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 .

Economy

Bad debt cannot simply be ‘socialized’

Michael Pettis Jul 16, 2014

Burgeoning debt in China was not an unlucky accident. It is fundamental to the way the growth model works. We coming closer to the 'Minsky Moment', in which the system requires an acceleration in credit growth simply to maintain existing…

Economy

Some things to consider if Spain leaves the Euro

Michael Pettis May 29, 2014

By Michael Pettis It might seem almost churlish to wonder what would happen if Spain were to leave the euro. The official European position is that the battle of the euro has been pretty much won, and anyone who argues otherwise will be…

Economy

Why a savings glut does not increase savings

Michael Pettis May 8, 2014

By Michael Pettis Debate about the global savings glut hypothesis is mired in confusion, a fundamental one of which is the seemingly obvious but false claim that a global savings glut must lead to higher global savings. Here, for example,…

Political Economy

Economic consequences of income inequality

Michael Pettis Mar 23, 2014

This is a loaded topic. This entry, however, is not intended to be political. Very few things in economics are good or bad in themselves, but rather can be good under certain conditions or bad under others. I want to try to tease out as…

Economy

Will emerging markets come back?

Michael Pettis Mar 3, 2014

By Michael Pettis I don’t often make reference to these kinds of things in my blog, but Saturday’s terrorist attack in the Kunming train station – in which 29 innocent people were hacked to death (the toll was especially high among the…

Markets

What do bank share prices tell us about growth?

Michael Pettis Feb 16, 2014

Owning shares in a bank is the functional equivalent of owning a call option on the bank’s future operational earnings, and if the share price contains little intrinsic value (i.e. the value of its assets does not exceed the value of its…

Political Economy

The impact of reform on growth in China

Michael Pettis Jan 30, 2014

I got a lot of feedback from my January 5 blog entry because of my argument that the implementation of the reforms proposed in the Third Plenum all but guarantees that growth rates in China will slow down. For that reason I thought it might…

Political Economy

Will the reforms speed growth in China?

Michael Pettis Jan 5, 2014

Although still vague on the specifics, China’s Third Plenum November partially clarified the nature of the reforms that Beijing is proposing for China over the coming year. Of course very little was said in any of the related releases about…

Monetary System

Monetary policy under financial repression

Michael Pettis Dec 20, 2013

In order to understand much of what is happening in China it is important to understand how financial systems operate under condition of financial repression. Because most of what we know about economics is derived from economists whose…

Political Economy

The politics of adjustment

Michael Pettis Dec 8, 2013

China is not the first country to have experienced a long period of miraculous growth. But the most difficult part of growth miracles has not been the growth miracle itself but rather the subsequent adjustment.